TOP STORIES
TABLE OF CONTENTS:
1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Fischer Sees No Recession in US or Europe
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Intel to Invest NIS 55 Million in Israeli Research Institute
2.2 Israeli Annual Water Technology Trade Exceeds $2 Billion
2.3 South Carolina Delegation Visits Israel
2.4 SodaStream Announces New Distribution Partner in Brazil
2.5 IncrediMail Changes Name to Perion Network
2.6 RAD Data Communications Opens Office in Lagos
2.7 ASUSTeK To Open Israeli Office
2.8 Wavion & Leadcom Agreement for Africa & Latin America
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Brazil's Embraer Eyes Doubling Mid East Small Jet Sales
3.2 OPIC Board Approves $150 Million for Investment in Egypt & MENA
3.3 Great Lakes Wins East Hidd Land Reclamation Project in Bahrain
3.4 Boeing & Emirates Announce Historic Order for 50 777-300ERs
3.5 King Faisal Specialty Hospital Deploys Comprehensive LUMEDX CVIS
3.6 Egypt to Make Airplane Fuel Instead of Sugar
3.7 Aeropostale to Expand Into Turkey
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
4.1 Pipeline Approved to Link Jerusalem to Desalination Plants
4.2 Yissum Introduces Environmentally-Friendly Biological Solution for Purifying Water
4.3 Egypt Plans to Launch Wind Farm Tender Offer
4.4 World Bank $297 Million to Morocco for Ouarzazate Concentrated Solar Power Plant Project
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Moody's Says Lebanese Government Failure to Fund STL Could Be Credit-Negative
5.2 Iraq Reaches Agreement with Kurds On Oil Contracts
►►Arabian Gulf
5.3 UAE to Bypass Straits of Hormuz with New Pipeline
5.4 Food Prices Drive Rise in Abu Dhabi Consumer Costs
5.5 Oman Eyes Slice of Global Medical Tourism Market
5.6 Oman Imposes Five-Day Work Week
5.7 Saudi Inflation Eases To 5.2% in October 2011
5.8 Saudi Arabia & South Korea in Nuclear Cooperation Deal
►►North Africa
5.9 Egypt's Inflation Hits Four-Year Low on Food Prices
5.10 Egypt Annual Urban Headline Inflation Slows For Sixth Consecutive Month
5.11 Egypt Plans To Continue Its Export Ban On Rice
5.12 Egypt's Unemployment increases to 11.9% in Third Quarter
5.13 Egypt's Trade Deficit Widens To $3 Billion in August 2011
5.14 Suez Canal Revenues Increase By 4.8% in October 2011 to Reach $447.9 Million
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Greek PM Says Parties To Agree Soon On Written Pledge
6.2 Greece Has €60 Billion in Unpaid Taxes
6.3 Bulgaria Finance Minister Does Not Rule Out VAT Cut Next Year
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 'Extinct' Frog Hops Back Into North Israel
7.2 Hijri New Year
*REGIONAL:
7.3 Diabetes Cases in Middle East Seen Doubling By 2030
7.4 Thousands of Kuwaitis Storm Parliament
7.5 Egyptian Government Submits Resignation to SCAF
7.6 Tunisia Announces Final Election Results
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8: ISRAEL LIFE SCIENCE NEWS
8.1 InSeal Successfully Treats with Novel Intravascular Large Bore Puncture Closure Device
8.2 Protalix's Acetylcholinesterase Demonstrates Treatment of Parkinson's Disease
8.3 NeuroDerm Announces Positive Results for ND0611 Dermal Patch for Parkinson's Disease
8.4 First Patient Receives Telescope Implant for End-Stage Macular Degeneration
8.5 BrainStorm's Study Offers the Biggest Hope to Stop Disease Progression in ALS Patients
8.6 Arineta Raises $10 Million
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 EZPack Develops Innovative Portable Water Storage
9.2 Zibaba Launches f-Commerce Ads Direct - Runs Facebook Ads Directly From Interface
9.3 Endeavour Energy Selects ClickSoftware for Optimized Mobile Workforce Management
9.4 Any.DO Launches Smartest Social To Do List App
9.5 Cellint Awarded a New Patent in Europe
9.6 Alvarion Announces BreezeCOMPACT Wireless Broadband Compact Base Station
9.7 Mellanox ScalableSHMEM 2.0 and ScalableUPC 2.0 for High Performance Computing
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's October CPI Rises By 0.1% As Housing Prices Fall
10.2 Israel's Trade Deficit Nearly Doubles
10.3 Foreigners Raised Investment in TASE to $252 Million in September
10.4 Israelis Sold $388 Million in Foreign Stocks in September
10.5 GPG Survey Puts Tel Aviv 17th in Property Prices
10.6 Over Half of Israeli Families Living In Poverty Are Employed
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11: IN DEPTH
11.1 ARABIAN GULF: Security Sectors in the Gulf - Immune to the Arab Awakening?
11.2 KUWAIT: Eastern Promise in China
11.3 QATAR: Geared for Growth
11.4 EGYPT: Rising Investment in Telecoms
11.5 EGYPT: Is Military Rule in Egypt Really Temporary?
11.6 MOROCCO: Growing Green Energy
11.7 GREECE: Lucas Papademos Aims to Steer Greece out of Crisis
11.8 CYPRUS: Moody's Downgrades Cyprus' Bond Ratings to Baa3/P-3
11.9 BULGARIA: Bulgarian Budget Positive, Eurozone Clouds Outlook Ratings
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1: ISRAEL GOVERNMENT ACTIONS & STATEMENTS
1.1 Fischer Sees No Recession in US or Europe
Bank of Israel Governor Stanley Fischer believe the Israeli economy is in a "relatively good condition" compared to the global economic crisis. Speaking on 15 November to discuss the recent economic developments in the world, Fischer said Israel "can ride through this period successfully if we run the economy in a responsible and organized manner." As for the global economy's situation, Fischer said, "The situation in the US is reasonable. It's not good, but there is growth and no foreseeable danger, at least in the short term, for the US to enter another recession. "Talks are of a 2.5% growth in 2012 – that's not impressive and not close to the potential growth rate, but it's a relatively good growth rate." The forecast for all of Europe hasn't dropped much since the beginning of the year. The expectation for European growth next year is less than 0.5% - that's not a recession, but an undesirable situation."
Fischer described two scenarios which may develop following the situation in Europe: "The first, as a result of heroic efforts, the eurozone survives in its current composition, including Greece. "This requires the eurozone governments to make extremely tough decisions, mainly the countries facing problems but also other countries in Europe, which will have to consider ways to finance their countries and banks so as not to reach a situation of bankruptcy. "The second scenario is that the eurozone will start collapsing. It may begin with Greece leaving the eurozone, but there are other possibilities that what happened to Greece will lead to the departure of other countries. "A huge financial problem in Europe will damage the entire world. Uncertainty today is very high, and it's a negative growth factor there and in the entire world… The ramifications are very hard to predict.
Moving on to discuss the Israeli economy, Fischer said Israel's growth rate was beginning to slow down. In order to tackle this situation, he said, the economy's solidness must be strengthened. "One of the most important things is to maintain the budget framework – not to increase tax rates and let the automatic stabilizers do their work." Fischer added that "the budget deficit is expected to grow, and that will require cutting government expenses or raising tax levels. The moment the Israeli government has a problem in funding the government, the government expenses, the markets will have to respond. The markets are not very generous – the moment they feel things are going the wrong way, the interest rates start climbing. The governor noted that "the Israeli economy is in a relatively good situation. The budget deficit is expected to be smaller compared to the world – around 3% and a bit more. The economy's inflation rate is low and is expected to stay low. "Unemployment is at its lowest rate in the past 30 years. The financial system is solid, and we have high foreign currency balances. We've found gas and have assets compared to our ability to run the economy and maintain its situation. (Ynet 15.11)
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2: ISRAEL MARKET & BUSINESS NEWS
2.1 Intel to Invest NIS 55 Million in Israeli Research Institute
Intel announced on 14 November that it would invest NIS 55 million (about $19 million) over a five-year period in the establishment of a new research institute, together with Israeli academic institutes. The institute will conduct research on computational intelligence and will study ways in which computer systems may enhance the abilities of the human brain in a vast array of complex tasks such as the analysis of mega volumes of information, comprehension of complex input, computational decision making and intelligible communication with humans. The institute will focus on computational intelligence infrastructure technologies: Advanced processor architecture, computer system methods, courseware for sensor input processing and its conversion to artificial intelligence. The institute will operate under the joint management of Intel and academic researchers and is expected to commence its activities in the beginning of 2012. Intel operates four R&D centers in Israel in Haifa, Petah Tikva, Jerusalem and Yakum, and two production fabs in Kiryat Gat and Jerusalem, which have 7,000 employees. The institute's research topics will be determined such as to promote the collaboration between Intel's development experts and academic researchers. (Ynet 11.15)
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2.2 Israeli Annual Water Technology Trade Exceeds $2 Billion
In mid-November, over 100 international exhibitors took part in the third Watec Conference on Water Technologies, Renewable Energy and Environmental Control in Tel Aviv. Foreign delegations include representatives from South Korea, Armenia, Senegal and the first ever delegation from Russia, as well as a Pennsylvania booth. Watec participants visited Israeli sewage treatment plants and Mekorot National Water Company sites where various water technologies are being tested, as part of an effort to expand exports. According to the Export Institute, over 200 Israeli companies export water technologies. The main export destination is the US, followed by Germany, Italy, Spain, Australia, France, India, Mexico, China and Turkey. The Pennsylvania booth, organized by the Commonwealth's authorized trade representative Atid, EDI (http://www.atid-edi.com), hosted two visiting Pennsylvania companies, as well as others who sent materials to increase their exports to Israel and the world. (Various 15.11)
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2.3 South Carolina Delegation Visits Israel
A 28-person delegation of South Carolina government and business officials visited Israel recently under the aegis of the American-Israel Chamber of Commerce Southeast Region. There was a specific focus on four industries: aerospace, wind energy, information technology and biomed, especially neuro-technology. The delegation met with Industry, Trade & Labor Ministry Chief Scientist Hasson and a MoU is being developed. The group received interest for cooperation in the fields of pharmaceuticals and emergency response. A meeting with the robotics and nanotechnologies team at Ben-Gurion University of the Negev also struck a resonant chord with the delegation. South Carolina's leading three universities – Clemson University, the University of South Carolina and Medical University of South Carolina –were all represented in the delegation. (Various 17.11)
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2.4 SodaStream Announces New Distribution Partner in Brazil
SodaStream International has signed an exclusive distribution agreement in Brazil with Grupo M. Cassab, a company that has managed global consumer brands in Brazil for more than 80 years. SodaStream products are expected to be available in Brazil during Q1/12. The Company also announced that its products are now available at El Corte Ingles in Spain and at Tesco in the UK. El Corte Ingles is the largest department store group in Europe, with a 75-year history of business in Spain. Tesco is the leading grocery market in the UK and the world's third largest retail group. Airport City's SodaStream (http://www.sodastream.com) manufactures beverage carbonation systems, which enable consumers to easily transform ordinary tap water instantly into carbonated soft drinks and sparkling water. Soda makers offer a highly differentiated and innovative solution to consumers of bottled and canned carbonated soft drinks and sparkling water. The Company's products are environmentally friendly, cost effective, promote health and wellness, and are customizable and fun to use. (SodaStream 09.11)
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2.5 IncrediMail Changes Name to Perion Network
IncrediMail has received stockholder support and formal approval from the Israeli Companies Registrar to change the Company's name to Perion Network as part of a rebranding campaign to reflect its new vision and expanding product portfolio. Perion is derived from the English translation of the Hebrew word for 'productivity' and better reflects their new corporate vision, to make the digital life of their users simpler and more enjoyable through a portfolio of easy to use productivity based applications and services. Founded in 2000, Tel Aviv's Perion Network (http://www.Perion.com) is a digital media company that provides products and services to consumers to help make their everyday life simpler and more enjoyable. Focusing on an underserved market of second wave adapters who value their time online, Perion offers a growing portfolio of easy-to-use products. The Company's products include: IncrediMail, an award winning e-mail product sold in over 100 countries in 10 different languages; Smilebox, a leading photo sharing product and service that lets customers quickly turn life's moments into digital creations to share and connect with friends and family in a fun and personal way; and PhotoJoy, a photo discovery and sharing screensaver & wallpaper product. (Perion 09.11)
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2.6 RAD Data Communications Opens Office in Lagos
RAD Data Communications opened its first African office on 22 November 22 in Lagos, Nigeria. Nigeria is committed to improving its telecom infrastructure and to leveraging the benefits brought by high speed data services and ubiquitous voice. RAD can play a pivotal role in enabling rapid service deployment and also lowering the cost of operations so essential to the success of operators in a very competitive and price sensitive market. RAD solutions enable carriers and service providers to deploy new revenue-generating Next Generation services over any access infrastructure while lower operating expenses and optimizing resources. RAD's cross-generation solutions protect their existing legacy revenue streams by facilitating a smooth migration to new packet switched infrastructure with minimal disruption to existing customers or networks. RAD products have been sold in Nigeria by local distributors for well over a decade. RAD's local partners in Nigeria are Dizengoff WA Limited and PPC Limited.
Founded in 1981, Tel Aviv's RAD Data Communications (http://www.rad.com) has achieved international recognition as a major manufacturer of high quality access and backhaul equipment for data communications and telecommunications applications. These solutions serve the data and voice access requirements of service providers, carriers, and enterprise networks, as well as utilities and transportation systems. (RAD Data 09.11)
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2.7 ASUSTeK To Open Israeli Office
'Globes' said that Taiwan's ASUSTeK Computer will soon open its first branch in Israel. Asus is following other major computer manufacturers - Hewlett Packard, Dell, Samsung Electronics, LG Corporation and Lenovo Group, which have Israeli offices to help importers deal with competition. In the past, when Asus sold motherboards, they relied more on their distributors, who sold products for assembly into computers. To sell Netbooks or Tables, Asus needs contact with the end user. The local access is very important in the case, which is why they need a branch in Israel with employees. Asus will launch two models of its Ultrabook in Israel. The company has already demonstrated that it is quick on its feet; it was the first company to launch the Netbook in Israel. The Ultrabook is basically a combination of a Netbook and a laptop. (Globes 14.11)
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2.8 Wavion & Leadcom Agreement for Africa & Latin America
Wavion and Leadcom Integrated Solutions, a global telecom system integrator, announced a strategic cooperation agreement for Africa and Latin America. Wavion, a Wi-Fi technology leader, offers complete end-to-end Wi-Fi solutions for operators, governments and enterprises in metro and rural areas. The solutions are based on Wavion Base Stations (WBSn) at 2.4 GHz, 5 GHz and 700 MHz, and include access, backhaul, CPEs, NMS, service provisioning and billing. Leveraging 802.11n MIMO with unique two-way Beamforming and powerful interference immunity, the WBSn family provides superior coverage and capacity, thus enabling service providers, communities and enterprises to deliver high quality service while reducing CAPEX and OPEX by more than 50%.
Yokneam's Wavion (http://www.wavionnetworks.com) is a technology leader in outdoor Wi-Fi applications for metro and rural areas with deployments in more than 75 countries. The company's two-way digital Beamforming and powerful Interference Immunity Suite are the first and only technology to resolve the significant performance, penetration and profitability challenges facing large-scale metro and rural deployments. Featuring Wavion Base Stations with 802.11n (WBSn) in 2.4 GHz and 5 GHz unlicensed bands and in 700MHz licensed band, Wavion offers end-to-end solutions including access, backhaul, CPEs, management and service provisioning tools. (Wavion 09.11)
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3: REGIONAL PRIVATE SECTOR NEWS
3.1 Brazil's Embraer Eyes Doubling Mid East Small Jet Sales
Brazilian plane maker Embraer is looking to double the number of jets it sells to the Middle East and Africa over the next two years. It sees rapid growth in the number of its E-Jet commercial aircraft operating in the region. Presently, Embraer has a 74% market share for jets with up to 120 seats in the Middle East and Africa. The goal is to double the number of units in the region in the coming two years. Embraer has 65 E-Jet units in the Arab world, flown by nine operators including EgyptAir, Gulf Air, Nasair, Saudi Airlines, Oman Air and Royal Jordanian. Embraer sees a potential for at least 310 additional units in the coming 20 years in the Middle East. In June, Embraer said it saw the Middle East, alongside China and Latin America, as key drivers for growth in demand for smaller aircraft. The company, which in April delivered two planes to Oman Air with another two set to arrive in 2012, said growth in the Middle East for 30- to 120-seater aircraft would average 6.9% over the next 20 years. Compared to the Middle East, Embraer said the more developed economies of North America and Europe would see lower demand due to their market maturity and slower economic recovery. Growth rates to 2030 will be 3.5% and 4.4% respectively. (AB 12.11)
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3.2 OPIC Board Approves $150 Million for Investment in Egypt & MENA
Egypt received a significant boost from the Overseas Private Investment Corporation (OPIC), the U.S. Government's development finance institution, when OPIC's Board of Directors approved $150 million in financing for investment in such sectors as consumer foods, manufacturing and financial services. OPIC's Board approved an investment guaranty to Citibank for a loan of up to $150 million to Citadel Capital, the leading private equity firm in the Middle East and Africa, to expand its subsidiaries working in critical sectors in Egypt and the Middle East and North Africa (MENA) region. Of the total guaranty amount, $125 million is specifically designated for investment in Egypt. The project represents another step toward fulfilling OPIC's commitment to provide $2 billion of investment support to the MENA region, announced by Secretary of State Clinton during her March trip to Egypt. In July, OPIC's Board approved $500 million in financing to support lending to small businesses in Egypt and Jordan.
OPIC is the U.S. Government's development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance and support for private equity investment funds. (OPIC 09.11)
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3.3 Great Lakes Wins East Hidd Land Reclamation Project in Bahrain
Oak Brook, Illinois' Great Lakes Dredge & Dock Corporation, the largest provider of dredging services in the US and a major provider of commercial and industrial demolition and remediation services, announced the award of the $57 million East Hidd Housing Project in Bahrain. Great Lakes will reclaim 618 acres of the Arabian Gulf on which the government of Bahrain will construct additional social housing for its citizens. Great Lakes' Bahraini joint venture partner Nass Contracting Company will install slope protection around the reclaimed area which represents 40% of the contract value. The Ministry of Housing is anxious to commence work on the project and Great Lakes will expedite mobilization to begin operations in December. Dredging work will continue through most of 2012. The East Hidd Project will be the ninth major land reclamation project undertaken by the Company in Bahrain. This will be the first major project for the recently upgraded cutter suction dredge (CSD) Ohio. Great Lakes made a significant investment in converting the former dustpan dredge to a world-class heavy-duty rock cutter suction dredge. With its new high cutter and swing power machinery, the CSD Ohio is well suited for capital and reclamation projects prevalent in the Middle East. (Great Lakes Dredge 18.11)
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3.4 Boeing & Emirates Announce Historic Order for 50 777-300ERs
Boeing and Dubai-based Emirates Airline announced an order for 50 Boeing 777-300ERs (Extended Range) plus options for an additional 20 of the popular twin-aisle commercial jetliner. The order, with a value of $18 billion, makes this the single largest commercial airplane order in Boeing's history by dollar value. It also makes 2011 the best-selling year for the 777 program, surpassing the previous record of 154 orders set in 2005. With the Emirates order, the 2011 net order book for the 777 currently stands at 182. The options for 20 additional airplanes are valued at $8 billion. Emirates is the world's largest 777 operator with a fleet of 94 777s through direct purchase and lease, plus additional unfilled orders on backlog for 41 777-300ERs previously on order. It is also the only airline in the world to operate every model in the Boeing 777 family, including the 777 Freighter. Boeing incorporated several performance enhancements for the 777-300ER, extending its range and payload capabilities. (BI-ME 13.11)
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3.5 King Faisal Specialty Hospital Deploys Comprehensive LUMEDX CVIS
Oakland, California's LUMEDX Corporation, a provider of vendor-neutral, integrated cardiovascular information and imaging systems (CVIS), announced that the King Faisal Specialty Hospital and Research Centre has deployed a comprehensive LUMEDX CVIS in its Heart Centre. The new solution connects cardiovascular patient data to the hospital electronic health record (EHR), thus enabling complete, longitudinal patient records accessible by physicians at any point in the continuum of care. Deployed in four stages, the King Faisal CVIS solution was designed to correspond to the Heart Centre sections' unique workflows. The Heart Centre at Saudi Arabia's King Faisal Specialty Hospital is a state-of-the-art facility providing world-class cardiac care. (LUMEDX 15.11)
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3.6 Egypt to Make Airplane Fuel Instead of Sugar
The Food and Industries Holding Company (FIHC) has decided to dismiss plans of building a sugar factory (from sugar beet), and instead build an airplane fuel factory. Airplane fuel will be produced from molasses, which is a by-product of the sugar production process. The project will need a total capital of EGP1.5 billion, and 60% of the capital will be raised from sugar beet companies and 40% from the Egyptian Petrochemicals Holding Company. The factory is projected to produce 50,000 tonnes of ethanol from molasses. (Beltone 16.11)
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3.7 Aeropostale to Expand Into Turkey
Aeropostale, a mall-based specialty retailer of casual and active apparel for young women and men, announced that it has signed a licensing agreement with FiBA Group to open approximately 30 stores across Turkey over the next five years. The first store is scheduled to open in summer 2012. FiBA Group is a privately owned company, founded by a Turkish entrepreneur, Husnu Ozyegin. The Ozyegin family has full ownership of FiBA Group, which consist of two holding companies - FiBA Holding and FiNA Holding. FiBA Holding was founded in 1989 to make investments in the financial sector. FiNA Holding was established in 1993 to invest in non-financial lines of businesses. FiBA Retail Group, a subsidiary of FiNA Holding, operates over 135 stores and has the sole franchisee rights of GAP, Banana Republic and Marks & Spencer brands across Turkey, Russia and Ukraine. FiBA Retail Group's most important strength is its qualified human resource with valuable experience in their fields. Their contribution is at the highest level to the success of the business. (Aeropostale 15.11)
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4: CLEAN TECH & ENVIRONMENTAL DEVELOPMENTS
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4.1 Pipeline Approved to Link Jerusalem to Desalination Plants
The Israel Water Authority has approved construction of Mekorot National Water Company's NIS 1.2 billion eastern section of the Fifth Water Line to Jerusalem project. This will be one of the Israel's largest infrastructure projects in the coming years. The Fifth Water Line to Jerusalem is scheduled to open in 2018. It will enable Mekorot to quadruple its water deliveries to the capital from 414,000 cubic meters a day to 1.66 million cubic meters a day. In future, the pipeline will also be able to supply drinking water to Palestinian communities in Jerusalem's environs and also allow Israel to export water to Jordan. Mekorot said that linking Jerusalem to the seawater desalination plants on the Mediterranean is part of the company's broader strategy to build a new national water carrier running from west to east. Jerusalem's water consumption is growing at a rapid 2.5% a year. Without the new pipeline, the city will face a water shortage by 2020. The Fifth Line to Jerusalem is classified as a national infrastructure enterprise, and the plans are almost finalized for deposit with the National Infrastructures Commission. The project's greatest engineering challenge will be the 13-kilometer tunnel, in order to minimize the pipeline's environmental impact in the Jerusalem Hills and nature reserves in the area. The 3.5-meter diameter tunnel will be Israel's longest, and the water will be pushed to higher elevations using innovative high-pressure water technology to push it up the gradient between Kisalon and Ein Kerem. Since Israel has no water pressure tunneling experience, Mekorot examined similar projects abroad. (Globes 10.11)
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4.2 Yissum Introduces Environmentally-Friendly Biological Solution for Purifying Water
Yissum Research Development Company of the Hebrew University of Jerusalem introduced an environmentally-friendly, biological solution for purifying contaminated water at WATEC. The invention uses bacteria as novel biofilters to reduce nitrate levels in water sources. The scientists developed novel polymer carrier beads that are loaded with denitrifying bacteria to create bio-filters for the removal of nitrates from water. The permeable polymer beads can contain either denitrifying bacteria alone or a combination of fermentative and denitrifying bacteria plus a carbon source, to reduce nitrate to nitrogen gas, which evaporates into the atmosphere. The dry bio-filters can be stably stored for years. The novel nitrate bio-filter can reduce high nitrate levels in both fresh-water and sea-water, and is easily applicable to water-purification systems for aquariums and nitrate-contaminated bodies of water. The invention can improve water quality for a wide range of aquarium fish, thereby extending their life expectancy. The efficiency of the novel technology was demonstrated in aquariums of up to 200 liters, where nitrate accumulation was successfully controlled. Currently, the technology is tested for treating large amounts of water and in purifying wells of groundwater by removing nitrate.
Yissum Research Development Company of the Hebrew University of Jerusalem (http://www.yissum.co.il) was founded in 1964 to protect and commercialize the Hebrew University's intellectual property. Products based on Hebrew University technologies that have been commercialized by Yissum currently generate $1.2 Billion in annual sales. Ranked among the top technology transfer companies in the world, Yissum has registered 6,100 patents covering 1,750 inventions; has licensed out 480 technologies and has spun out 65 companies. (Yissum 15.11)
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4.3 Egypt Plans to Launch Wind Farm Tender Offer
Electricity & Energy Minister Dr. Yunis announced Egypt intends to launch a tender offer for the installation of wind farms on the Gulf of Suez, with a capacity of 200 MW. The total cost of the project is estimated at $500 million and is expected to receive funding from the European Investment Bank and the European Commission. The news is a positive indicator for El Sewedy Electric Co., in case the contract comes into effect, but the pundits continue to maintain a conservative outlook for the wind sector in the medium-term. Their view is indicative of the lack of liquidity in Egypt, along with other priorities in terms of domestic funding. (Beltone 14.11)
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4.4 World Bank $297 Million to Morocco for Ouarzazate Concentrated Solar Power Plant Project
The World Bank approved $297 million in loans to Morocco to help finance the Ouarzazate Concentrated Solar Power Plant Project, taking a historic step toward realizing one of the first large-scale plants of this kind in North Africa to exploit the region's vast solar energy resources. With this approval from the Bank's Board of Executive Directors, Morocco takes the lead with the first project in the low-carbon development plan under the ambitious Middle East and North Africa Concentrated Solar Power (CSP) Scale-up Program. A $200 million loan will be provided by the International Bank for Reconstruction and Development, the part of the Bank that lends to developing country governments, and another $97 million loan will come from the Clean Technology Fund. The 500 megawatt (MW) Ouarzazate solar complex, as the first power site, will be among the largest CSP plants in the world and is an important step in Morocco's national plan to deploy 2000 MW of solar power generation capacity by 2020. The World Bank has supported Morocco's national Solar Power Plan since it was launched in 2009 and is now making this significant loan to co-finance the development and construction of the Ouarzazate Project Phase 1 parabolic trough plant through a Public Private Partnership between the Moroccan Agency for Solar Energy (MASEN) and a private partner. Ouarzazate Phase 1 will involve the first 160 MW and will help Morocco avoid 240,000 tons of CO2 equivalent a year. (WB 18.11)
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5: ARAB STATE & PAKISTANI DEVELOPMENTS
5.1 Moody's Says Lebanese Government Failure to Fund STL Could Be Credit-Negative
Moody's said that the failure of the Lebanese government to fund the Special Tribunal for Lebanon (STL) could lead to economic or financial sanctions from the international community. If these sanctions are directed at the banking sector, this could be credit-negative for Lebanon, particularly if the sanctions reduce the inflow of deposits and remittances, liquidity the government relies on to finance public debt. Moody's added that sanctions appear unlikely, but cautioned that potential consequences could be severe. The country is required to transfer $32 million, or 49%, of the STL's annual budget to the United Nations. The STL published its findings on its investigation surrounding the assassination of Lebanese Prime Minister Rafik Hariri in June 2011, charging four Hezbollah members and reviving tensions within Lebanon. According to Moody's, a decision to fund the STL could cause a domestic political crisis and potentially a fall of the current government. (Beltone 14.11)
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5.2 Iraq Reaches Agreement with Kurds On Oil Contracts
Iraq has reached a tentative agreement on crude exploration and revenue with the semi-autonomous Kurdish region. Baghdad and the Kurdish Regional Government have reached “mutually acceptable” solutions to long-standing disputes over oil, territory and Kurdish armed forces. Iraqi PM al-Maliki and Kurdish Prime Minister Barham Salih held talks in Baghdad in late October and appointed a trio of committees to hammer out their differences. Those committees completed their final reports on 5 November and submitted them to al-Maliki and Salih. Baghdad and Kurdish authorities have clashed over how to oversee drilling and allocate revenue from the Arabian Gulf nation's crude reserves since the fall of Saddam Hussein in 2003. Relations reached a low point in 2009 when oil exports were temporarily suspended.
The accord will be approved by the Iraqi parliament's Oil and Energy Committee as soon as it's received. The accord has ended the risk that foreign oil producers such as Exxon, Marathon Oil Corp. and Gulf Keystone Petroleum Ltd. (GKP) would be stripped of some oilfield projects as punishment for signing contracts in the Kurdish-controlled region. Exxon is the latest Western entrant into Kurdistan. Others include Vallares, Afren (AFR), Hess Corp., Murphy Oil Corp., Marathon Oil Corp. and Repsol YPF SA. Iraq's 115 billion barrels in estimated crude reserves are exceeded only by those of Saudi Arabia, Venezuela and Iran. (BI-ME 12.11)
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►►Arabian Gulf
5.3 UAE to Bypass Straits of Hormuz with New Pipeline
The United Arab Emirates could soon start pumping oil via a key pipeline that will allow it to bypass the Straits of Hormuz and protect exports if Western powers resort to military action in a row over Iran's nuclear program. The Abu Dhabi Crude Oil Pipeline (ADCOP) project, a 480-km pipeline with a capacity of up to 2.5 million barrels per day (bpd) will allow the UAE, one of the world's top five exporters, to boost exports from its Fujairah terminal outside the Straits and on the Gulf of Oman. The Strait of Hormuz is the most important oil transit channel in the world, with some 15.5 million barrels or about a third of all sea-borne oil passing through in 2009. U.S. warships patrol the area to ensure the safe passage. Even though some analysts believe an imminent military action against Iran rather unlikely, they think the pipeline is crucial for the sustainability of oil exports with political tensions in the region on the rise. Most of the crude exported from Saudi Arabia, Iran, the United Arab Emirates (UAE), Kuwait and Iraq -- together with nearly all the liquefied natural gas (LNG) from lead exporter Qatar -- must pass through a four-mile (6.4 kilometer) wide shipping channel between Oman and Iran. The pipeline would link state oil firm Abu Dhabi National Oil Company's Habshan oilfields to the port of Fujairah, one of the top three bunkering hubs and a major oil storage terminal. (BI-ME 21.11)
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5.4 Food Prices Drive Rise in Abu Dhabi Consumer Costs
Consumer prices in Abu Dhabi climbed 2.1% during the first ten months of 2011 driven by rising food prices. The consumer price index (CPI) rose 0.9% last month compared to October 2010 representing a 22-month low, a report published by the Statistics Centre Abu Dhabi showed. Month-to-month, prices rose 0.3%, the SCAD analysis added. Food and non-alcoholic drinks contributed the largest share (64.2%) of the rise in the index during the first ten months of 2011. The largest increase within this group was in the prices of meat and coffee, tea and cocoa, which advanced by 14.3% each. Other big risers were fruits (up 11.4%), soft drinks (up 8.7%), and bread and cereals (up 7%). The transport and housing, water, electricity, gas and other fuels groups also helped drive up prices from January to October with 6.2% and 1.8% rises compared to the same period last year. By contrast, the clothing and footwear group saw prices drop by nearly 15% compared to the first 10 months of 2010, SCAD added. The statistics showed that in October the most significant individual price increase was eight% reported for the restaurants and hotels group, followed by alcoholic beverages and tobacco (up 7.4%, while clothing and footwear prices fell 11.3% compared to October 2010. (AB 12.11)
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5.5 Oman Eyes Slice of Global Medical Tourism Market
The Apex Medical Group signed its first land acquisition deal as part of plans to set up a $1b medical city in Oman. An agreement was signed with Oman authorities for the integrated medical tourism complex in Salalah, which aims to put Oman on the global medical tourism map. AMG will develop a medical city to include a 530 bed hospital, a regional organ transplant and rehabilitation center, a diagnostic and medical prevention center, healthcare resort and a healthcare education complex. The project will be developed initially on 500,000 sq. m of land but he had government approval to expand on a further 300,000 sq. m of land. The site was already connected to major utilities and was just 15 minutes' drive from the Salalah International airport which is undergoing expansion which is slated for completion in 2014. The project is in line with the Oman government's five-year tourism development plan and is the first healthcare infrastructure development project in Oman being set up by a private investor. The medical city project also aims to tap the international growth market of medical tourism, which is predicted by consultants McKinsey to be worth over $100b by 2012. (AB 12.11)
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5.6 Oman Imposes Five-Day Work Week
Oman has introduced a new regulation for the private sector to set a maximum five day work week, according to the Oman Chamber of Commerce and Industry (OCCI) Chairman. There will be no grace period for the regulation and it is due to take place immediately. It had been one of the major demands for protests in Oman earlier this year. There will be no compensation for the private sector and the regulation is designed to comply with ILO standards. (Beltone 15.11)
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5.7 Saudi Inflation Eases To 5.2% in October 2011
Annual inflation in Saudi Arabia eased to 5.2% in October 2011 from 5.3% in September 2011, as food prices remained unchanged over the month, according to the Central Department of Statistics. The annual increase in food and beverage prices has slowed to 3.2% in October, down from 4.9% in September 2011. On a monthly basis, consumer prices rose only 0.5% in October 2011 compared to 0.9% in September 2011. Pundits believe that inflation in Saudi Arabia will not exceed an average of 5% in 2011. The recent decline in food prices, which represent nearly 33% of the CPI basket, has helped tame overall inflation. Nevertheless, upward pressure on rents will persist in the coming months until new housing supply comes on stream. Rental inflation has increased to 8.0% y-o-y in October from 7.7% in September 2011. (CDS 22.11)
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5.8 Saudi Arabia & South Korea in Nuclear Cooperation Deal
Saudi Arabia has signed a bilateral agreement with South Korea for cooperation on the development of nuclear energy as the world's top oil exporter seeks to diversify its energy mix to meet rising power demand. The agreement calls for cooperation in research and development, including building nuclear power plants and research reactors, as well as training, safety and waste management. This is the third nuclear agreement Saudi Arabia signed following similar deals with France and Argentina. Although it sits on the world's biggest oil reserves, Saudi Arabia is struggling to keep up with rapidly rising power demand expected to triple by 2032 requiring additional energy plants with total installed power production capacity of around 80 GW. The kingdom plans to turn to solar and eventually nuclear energy to reduce its need to burn fuel oil for electricity and preserve oil for lucrative export markets. It may build up to 16 nuclear power reactors by 2030. Meanwhile, South Korea aims to increase its reliance on nuclear energy, undeterred by Japan's nuclear disaster, its deputy minister for energy and resources policy said in April. (BI-ME 15.11)
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►►North Africa
5.9 Egypt's Inflation Hits Four-Year Low on Food Prices
Egyptian annual consumer price inflation hit a four-year low in October, easing pressure on the interim government which came to power on the heels of a popular uprising early this year that was triggered partly by soaring food prices. Urban consumer inflation was 7.1% year-on-year in October, down from 8.2% in September, the state statistics agency CAPMAS said on 10 November, its lowest level since November 2007. Rising living costs and a widening rich-poor divide were seen as one trigger for the uprising in January and February that ended the three-decade rule of President Mubarak. Slowing food price growth was mainly due to a decline in the cost of locally grown produce, especially rice, which fell 22% in September and October because of a good harvest. Core annual inflation, which strips out subsidized goods and volatile items including fruit and vegetables, slipped to 7.50% in the year to October from 7.95% in September. The urban consumer price index for October was 119.2 versus 111.3 a year earlier, CAPMAS said. (CAMPAS 10.11)
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5.10 Egypt Annual Urban Headline Inflation Slows For Sixth Consecutive Month
Egypt's annual urban headline inflation slowed down for the fourth consecutive month to 7.1% in October 2011, down from 8.2% in September 2011, data by CAPMAS showed. On a monthly basis, urban headline inflation also slowed down to 0.3% in October 2011 for the first time since May 2011, after it had reached 1.4% in September 2011. Beltone said that the slowdown in both the monthly and annual urban headline inflation is attributable to the prices of food and beverages, which constitute 40% of the CPI. Prices of food and beverages fell 0.45% m-o-m, while their annual price increase eased to 8.67% in October 2011 from 8.99% in September 2011. Most of both the annual slowdown and monthly fall in the prices of food and beverages are on the back of a significant slowdown in the annual inflation of fruits and vegetables, and a fall in their monthly prices in October 2011. On a monthly basis, other items in the headline CPI have not witnessed any price increases during October 2011, except for recreation, culture and education. However, on an annual basis, inflation of other items in the headline CPI has only eased slightly. This explains why the annual core inflation did not fall as significantly as headline inflation in October 2011, as core inflation excludes volatile food items such as fruits and vegetables, which explain most of the annual slowdown in headline inflation. Annual core inflation fell to 7.6% in October 2011 from 7.95% in September 2011. (Beltone 13.11)
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5.11 Egypt Plans To Continue Its Export Ban On Rice
The government intends to continue banning rice exports to meet the needs of the local market. Any government attempt to open up rice exports will lead to a dramatic rise in local prices (to EGP8/kilo up from EGP4/kilo) Agriculture Ministry sources said. According to international statistics, the Egypt's per capita consumption of rice is 40kg. Egypt's total production of rice in 2011 has been 5 million tons, as compared to 6 million tons last year. The total area on which rice has been cultivated amounts to 1.6 million acres, with an average productivity of 3.5 tons per acre, down from 4 tons last year. Although the government has announced its intention to buy 1 million tons of rice from farmers, it has only received 200,000 tons so far, meaning that its strategic rice reserves should decrease significantly. This year's decline in rice production could be attributed to the fertilizer shortage in various governorates, irrigation problems and a lack of agricultural guidance. (Beltone 13.11)
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5.12 Egypt's Unemployment increases to 11.9% in Third Quarter
Unemployment in Egypt increased to 11.9% in Q3/11, marking a significant annual leap and a continuous steady quarterly increase, data by CAPMAS showed. Unemployment had increased significantly as a result of the political events that unfolded in Egypt in January 2011, climbing from 8.9% in Q3/10 to 11.9% in Q3/11. The labor force reached 26.6 million in Q3/11, increasing by 1.2% q-o-q and 2% y-o-y, underscoring the urgency to generate employment opportunities to absorb new entrants to the labor market.
Unemployment in Egypt has been a long-standing issue and concern of past governments. High unemployment in Egypt is a product of many structural problems characterizing the labor market, a renowned skills mismatch between labor supply and demand as well as a faltering education system. High rates of economic growth recorded since 2004 in Egypt have failed to create much-needed employment opportunities. Currently, the same problems persist and are further exacerbated by much lower growth rates and lack of private investment. Furthermore, the government's ability to step in and compensate for private investments is tightly constrained by its narrowing fiscal space. Therefore, despite claims by the current government and campaigning political parties to prioritize employment generation, with the current resources available, they will fail to achieve their objective. Policies to attract both private domestic and foreign investments, in addition to securing external funds targeted toward investment projects, is crucial to address unemployment in Egypt. Unemployment will reach 12% in FY11/12 and could start to decline FY12/13 once the political situation clears up and investments start flowing back into the economy. (Beltone 14.11)
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5.13 Egypt's Trade Deficit Widens To $3 Billion in August 2011
Egypt's merchandise trade deficit widened to $3 billion in August 2011, after narrowing to $2.2 billion in July 2011 on the back of an increase in import growth, data by CAPMAS showed. Merchandise imports reached $5.2 billion, increasing by 11.4% y-o-y and by 6.9% in August 2011, while merchandise exports reached $2.2 billion, increasing by 8.8% y-o-y and decreasing by 16.5% m-o-m. Exports had been performing very well during the first five months post revolution, growing by an average of 7.6% m-o-m and by 20.3% y-o-y during Feb - June 2011. Imports, on the other hand, exhibited weaker growth rates during the same period, growing by a meager 3.7% m-o-m, on average and by 10.7% y-o-y, on average during Feb-June 2011. This had a positive effect on the trade balance and hence on the current account deficit in FY10/11, which had narrowed to 1.2% of GDP, down from 2% of GDP in FY09/10. (Beltone 14.11)
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5.14 Suez Canal Revenues Increase By 4.8% in October 2011 to Reach $447.9 Million
Suez Canal revenues increased by 4.8% y-o-y in October 2011 to reach $447.9 million, data by the Suez Canal Authority showed. Suez Canal revenue growth of 4.8% y-o-y in October 2011 falls below the 7% growth recorded a year earlier. In addition, Suez Canal revenues fell by 7.3% m-o-m in October 2011, recording the first monthly fall since February 2011. The modest annual increase in revenues in October 2011 is on the back of an annual increase in the total tonnage of passing vessels of 24%, particularly that of non-oil vessels, which grew by 26% y-o-y. However, the number of vessels fell by 2% y-o-y in October 2011. Oil tankers represented 25% of total vessels that passed through Suez Canal in October 2011, same as a month earlier. Despite the fact that domestic risks related to the Suez Canal appear to be marginal, other external risks have emerged, such as the possibility of a double dip recession, which would slow down international trade and in turn, slowdown traffic activity at the Canal. October's monthly dip in Suez Canal revenues signal some worries over the Suez Canal performance in FY11/12. However, this could be a one-off event. (Beltone 16.11)
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6: TURKISH, CYPRIOT, GREEK & BULGARIAN DEVELOPMENTS
6.1 Greek PM Says Parties To Agree Soon On Written Pledge
Greek Prime Minister Papademos said on 22 November that he was confident that parties in his national unity government would soon sign a written pledge demanded by the EU to back austerity measures needed to unlock the next tranche of aid. The leader of one of the three coalition parties, Antonis Samaras of the conservative New Democracy, has infuriated EU leaders by refusing to sign the pledge. He says his verbal consent is sufficient. Without the written commitment, EU leaders have said Greece will not receive the next aid tranche, worth €8b, that it needs next month to avoid defaulting on its debts. Papademos also expressed support for eurobonds as a mean to ease the sovereign debt crisis facing his country and other members of the euro zone. The European Commission will present a study of joint euro zone debt issuance, or ”stability bonds” as a way to help stabilize the debt market and lower sovereign financing costs in the future. To overcome opposition to the idea of eurobonds from Germany and the European Central Bank, the Commission will also propose much tighter and more intrusive control of national budgets in the 17 countries that use the euro. (ekathimerini 22.11)
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6.2 Greece Has €60 Billion in Unpaid Taxes
Greece has €60b ($80b) in unpaid taxes because of tax avoidance and lack of compliance, a report by the European Commission's task force on Greece said on 17 November. The figure is equivalent to around 25% of Greek GDP. Greece's total public debt stands at €370b, or around 160% of GDP. Of the €60b of unpaid taxes, half is in uncollected taxes that are already subject to court cases, some of which have been running for more than 10 years, the report said. Only about €8b is quickly recoverable. The Commission's Task Force on Greece has the task of identifying and coordinating all technical assistance to Greece to help reforms in the country and boost its economic growth. (FM 17.11)
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6.3 Bulgaria Finance Minister Does Not Rule Out VAT Cut Next Year
Bulgaria's finance minister has confirmed that the prospect of a cut in the value-added tax (VAT) rate, which now stands at 20%, is likely next year. Minister Djankov pointed out that to be successful tax changes of this kind have to come as a surprise. "Otherwise consumption can grind to a halt, waiting for the new VAT to come into force. There is a risk of artificially slowing down consumption." Bulgaria has the lowest personal and corporate income tax in the EU at 10%, which was introduced at the beginning of 2008, replacing the previous system, which combined several different tax rates - between 20 and 24%, depending on income. Plans for a VAT increase emerged at the beginning of last year, running counter to the promises the center-right government made after coming into office. Right after the elections in the summer of 2009 the cabinet had vowed to cut the tax from the current 20% to 18% in 2010 and by a further 2% by the end of its term. (SMN 10.11)
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7: GENERAL NEWS AND INTEREST
*ISRAEL:
7.1 'Extinct' Frog Hops Back Into North Israel
A frog species believed to be extinct has hopped back into sight in northern Israel. The frog is native to the Hula Valley, a swamp drained in the 1950s to stop malaria. It was spotted by a Nature and Parks Authority inspector as he was following pelicans in the Hula Valley. While traveling in his off-road vehicle, he suddenly noticed a small animal hopping on the track. He and the director and ecologist of the Hula Nature Reserve were amazed to find out that he had found one of the rarest amphibians in the world, which was declared extinct from Israeli nature in the late 1950s. This particular species, Discoglossus Nigriventer, was discovered by Prof. Heinrich Mendelssohn and Prof. Heinz Steinitz in 1940s and little is known about it. It is a medium-sized frog which could only be found in the Hula swamps area. The frog was rare even before. In the 1940s, a specimen ate a second frog, leading to speculation the species is cannibalistic. The rehydration of the Hula area may have led to the frog sighting and said more are likely in the reserve. (Ynet 20.11)
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7.2 Hijri New Year
On 27 November, Moslems will mark the Islamic New Year, which is the beginning of a new Islamic calendar year of 1433 AH. The first day of the year is observed on the first day of Muharram, the first month in the Islamic calendar. Since the Islamic year is 11 to 12 days shorter than the Gregorian year, the Islamic new year does not come on the same day of the Gregorian calendar every year. While some Islamic organizations prefer determining the new month (and hence the new year) dates by local sighting of the moon, most Islamic institutions and countries, including Saudi Arabia, follow astronomical calculations to determine future dates of the Islamic calendar. The Islamic year is known as the hijri year (or AH anno hegirae), as it commemorates the hijra or flight of Muhammad and his followers to the city of Medina in 622 CE.
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*REGIONAL:
7.3 Diabetes Cases in Middle East Seen Doubling By 2030
The number of people suffering with diabetes in the Middle East and North Africa is expected to double in less than 20 years, the International Diabetes Federation (IDF) has said. Data from its global study indicates that the number of people living with diabetes is expected to rise from 366 million in 2011 to 552 million by 2030. In the Middle East and North Africa Region, 32.6 million or 9.1% of the population now have diabetes, the IDF said. It added that this number is expected to double, with estimates that there are as many as 19.2 million people still undiagnosed. The new regional figures also show that the prevalence of type 2 diabetes in the region for younger age groups is substantially higher than the global average. The IDF said that by 2030, 11% of the Middle East and North Africa region or 59.7 million people will be living with diabetes. It added that six out of the world's top ten countries with the highest prevalence of diabetes are in the region. (AB 14.11)
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7.4 Thousands of Kuwaitis Storm Parliament
Thousands of Kuwaitis stormed parliament on 16 November after police and elite forces beat up protesters marching on the prime minister's home to demand he resign. The demonstrators broke open parliament's gates and entered the main chamber, where they sang the national anthem and then left after a few minutes. The police had used batons to prevent protesters from marching to the residence of Prime Minister Sheikh Nasser Mohammad al-Ahmad Al-Sabah, a senior member of the ruling family, after staging a rally outside parliament. This was the first political violence in Kuwait since December, when elite forces beat up protesters and MPs at a public rally, though activists have been holding protests since March. Tension has been building in Kuwait over the past three months after it was alleged that about 16 MPs in the 50-member parliament received about $350 million in bribes. The opposition has been leading a campaign to oust the premier, whom they accuse of failing to run the wealthy nation and fight corruption, which has become wide-spread. The premier, 71, has been a target of opposition criticism since he was appointed to the job in February 2006, forcing him to resign six times. Parliament has also been dissolved three times in the same period. Kuwait's Emir denounced the storming of parliament and said he would not dissolve the assembly or allow the prime minister to resign, as demanded by the opposition. (BI-ME 17.11)
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7.5 Egyptian Government Submits Resignation to SCAF
Egyptian Prime Minister Sharaf's government submitted its resignation to SCAF on 21 November, but SCAF has not accepted the resignation yet. The current government is proceeding with its duties until SCAF reaches a decision regarding its resignation. Tahrir Square demonstrations have been calling for the resignation of Sharaf's government, to be replaced with a government that has full powers and is not controlled by SCAF. This new government, which people are calling for, should manage the transition process until elections and until SCAF hands over power to a civilian government and a president by April 2012.
At press time, Egypt's ruling Military Council announced in response that it has set the presidential elections for June. The announcement was made amid growing civil unrest and rumors that the Council may relinquish power in favor of Cairo's Supreme Court. The SCAF agreed to speed up the transition to civilian rule in a deal made with Islamist groups but which seemed unlikely to satisfy the demands of liberal parties and the more than 100,000 protesters who gathered in the center of the capital to demand an immediate transfer of power. The agreement came after the ruling Supreme Council of the Armed Forces met with representatives of the Muslim Brotherhood and other Islamist groups in a session that was boycotted by most other political parties. The deal called for a new constitution and a presidential election no later than next June, as well as a new civilian cabinet to be led by a technocrat prime minister rather than a politician. Under the agreement, the first round of elections for a national assembly would go ahead as scheduled on 28 November, a major goal of the Brotherhood, which stands to win a large share of the seats. But it would also leave the civilian government reporting to the military, effectively a continuation of what amounts to martial law in civilian clothes, until next June. (Various 22.11)
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7.6 Tunisia Announces Final Election Results
The final tally from Tunisia's historic Constituent Assembly election was released on 14 November, with the moderate Islamist Ennahda Movement winning the largest share. Ennahda secured 89 of the Constituent Assembly's 217 seats, followed by the Congress for the Republic (CPR) with 29 seats and the People's Petition for Freedom, Justice and Development with 26 seats. Ettakatol, or the Democratic Forum for Labor and Liberties (FDTL), secured 20 seats while the Progressive Democratic Party (PDP) won 16 seats. Al Moubadara party and the Modernist Democratic Pole (PDM) party won 5 seats each, while Afek Tounes captured 4 seats, followed by the Tunisian Communist Labor Party with 3 seats. The Movement of Socialist Democrats and the Progressive Unionist People's Movement both won 2 seats while 16 parties won a single seat each. More than 4.3 million Tunisians cast their ballots in the poll, representing nearly 52% of the country's 8.29 million eligible voters. The commission noted that the rate of cancelled ballots was 3.6% while the rate of blank ballots was 2.3%. (Magharebia 15.11)
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8: ISRAEL LIFE SCIENCE NEWS
8.1 InSeal Successfully Treats with Novel Intravascular Large Bore Puncture Closure Device
InSeal Medical announced the successful treatment of three patients with its investigational intravascular large bore puncture closure device. InSeal aims to solve a significant surgical limitation in cardio-vascular procedures by providing physicians with the first device to percutaneously seal large bore punctures in blood vessels from the inside. The InSeal closure device achieved a complete acute sealing in each patient with no further bleeding or hematoma at the access site. Twenty-four hours following the procedure, the trial's patients began to ambulate and ultrasound testing revealed normal blood vessel flow. Patients were discharged from the hospital within 48 hours and no complications were reported through 30 days of follow-up. The InSeal closure device was delivered into the access artery through large bore sheaths used in TAVR and EVAR procedures. The device is deployed across the puncture, with a biodegradable membrane patching the site. In the trial, delivery and deployment of the InSeal closure device took less than two minutes. The experimental device does not need sutures.
Caesarea's InSeal Medical (http://www.InSealMedical.com) develops and manufactures percutaneous vascular closure devices for sealing of puncture site following a treatment involving large bore sheath. The Company's first product in development is an intravascular closure device, which supports the closure of 14-21Fr punctures in vessels of 6-10mm in diameter. (InSeal 10.11)
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8.2 Protalix's Acetylcholinesterase Demonstrates Treatment of Parkinson's Disease
Protalix BioTherapeutics investigated of the effect of Protalix's PRX-105 on alternative splicing patterns in the striatum, which may confer protection in Parkinson's disease. PRX-105 is a plant derived version of the human soluble acetylcholinesterase splice variant R (AChE-R) that is in development for several indications, including a biodefense program and an organophosphate-based pesticide treatment program. Building on prior research supporting a role for disrupted alternative splicing in several neurodegenerative diseases, scientists from the Hebrew University of Jerusalem, Israel and Protalix BioTherapeutics investigated splicing patterns in pre-clinical models of Parkinson's disease to determine a possible role of AChE-R in the brain's protective mechanisms. The research highlights that a splice shift, either inherited or induced by environmental factors (e.g. neurotoxins), from the more common 'synaptic form' of acetylcholinesterase (AChE-S) to the monomeric 'read-through' variant of AChE (AChE-R), is important in conferring protection against Parkinson-like symptoms. Furthermore, intravenous injection with PRX-105 induced a protective gene expression profile in the striatum of the brain.
Carmiel's Protalix (http://www.protalix.com) is a biopharmaceutical company focused on the development and commercialization of recombinant therapeutic proteins expressed through its proprietary plant cell based expression system, ProCellEx. Protalix's unique expression system presents a proprietary method for developing recombinant proteins in a cost-effective, industrial-scale manner in an environment free of mammalian components and viruses. Protalix's lead compound, taliglucerase alfa, an enzyme replacement therapy for the treatment of Gaucher disease, completed phase III development. (Protalix 10.11)
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8.3 NeuroDerm Announces Positive Results for ND0611 Dermal Patch for Parkinson's Disease
NeuroDerm (http://www.neuroderm.com) announced the results of a Phase I/II safety and pharmacokinetic trial of ND0611, administered as an adjunct therapy to Sinemet, Sinemet CR or Stalevo, in patients with advanced Parkinson's disease. ND0611 is a proprietary carbidopa liquid formula administered sub-cutaneously via a dermal patch to increase the bioavailability and efficacy of orally- administered levodopa. Results of this study support the continued development of ND0611 for the treatment of Parkinson's disease. ND0611's success in its first phase I/II trial significantly raises the probability of it becoming a new treatment option for PD patients. ND0611 is unique: it is the first drug developed to administer carbidopa systemically; it acts directly on levodopa metabolism not only in the gastrointestinal tract; and it probably employs a different mode of action than orally administered carbidopa. ND0611 has now been shown to improve levodopa's bioavailability in patients with any type of oral levodopa drug used even improving the bioavailability of what is considered to be the best current levodopa oral therapy. One can now realistically hope that ND0611 may eventually establish a higher standard of care for PD patients undergoing oral LD therapy". This trial was supported by a grant of $1 million by The Michael J. Fox Foundation for Parkinson's Research as part of the Foundation's Clinical Intervention Awards 2010 program.
Ness Ziona's NeuroDerm is an emerging pharmaceutical company that develops therapies for the treatment of CNS diseases. NeuroDerm's technology is based on proprietary reformulations of well-established oral drugs whose low bio-availability is the major impediment to better efficacy. The company's lead products are ND0611, a revolutionary skin patch for the treatment of Parkinson's disease and ND0801, a combination patch for the treatment of ADD/ADHD. Other programs focused at other diseases, including schizophrenia and Alzheimer's disease, are in different stages of development. (NeuroDerm 09.11)
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8.4 First Patient Receives Telescope Implant for End-Stage Macular Degeneration
VisionCare Ophthalmic Technologies announced that the first patient has received the FDA-approved Implantable Miniature Telescope (by Dr. Isaac Lipshitz) procedure indicated to improve vision in patients with end-stage age-related macular degeneration (AMD). The procedure was performed on an outpatient basis at Carondelet Health Network's St. Joseph's Hospital in Tucson. This first procedure marks the launch of VisionCare's CentraSight treatment program, a new patient care program utilizing the first-of-kind telescope implant for treating patients with the most advanced form of AMD and the leading cause of blindness in older Americans, end-stage AMD. Regional CentraSight Centers of Excellence - multidisciplinary healthcare provider teams trained in patient evaluation, surgical treatment and visual rehabilitation - are beginning to treat patients this month. Noridian Administrative Services, Medicare's Administrative Contractor for Arizona, was the first Medicare contractor to cover the telescope implant procedure for Medicare beneficiaries visually impaired by end-stage AMD. Other Medicare regional contractors have also begun covering the telescope procedure for eligible patients. The telescope implant is designed to improve visual acuity. The magnification provided by the implant reduces the impact of the blind spot caused by end-stage AMD. End-stage AMD causes severe to profound central vision loss in both eyes due to either wet AMD that has progressed to scarring of the macula despite drug treatments, or dry AMD that has progressed to geographic atrophy, the most advanced form of dry AMD.
VisionCare Ophthalmic Technologies (http://www.visioncareinc.net), headquartered in Saratoga, CA, is a privately-held company focused on development, manufacturing and marketing of implantable ophthalmic devices and technologies that are intended to significantly improve vision and quality of life for individuals with untreatable retinal disorders. The company's R&D and manufacturing facility is located in Petah Tikva, Israel. (VisionCare )
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8.5 BrainStorm's Study Offers the Biggest Hope to Stop Disease Progression in ALS Patients
BrainStorm Cell Therapeutics announced that patients from across the globe are demanding to be included in the pioneering clinical study started earlier this year at Jerusalem's Hadassah University Medical Center. The current Hadassah study, in collaboration with BrainStorm, utilizes BrainStorm's NurOwn technology for growing and modifying adult stem cells to treat ALS as well as other neurological diseases. Amyotrophic lateral sclerosis (ALS), often referred to as Lou Gehrig's Disease, is a progressive neurodegenerative disease that affects nerve cells in the brain and the spinal cord. BrainStorm's core technology, NurOwn, processes autologous adult human mesenchymal stem cells that are present in bone marrow and are capable of self-renewal as well as differentiation into many other cell types. Adult human bone marrow cells are induced to differentiate into astrocyte-like cells capable of releasing neurotrophic factors, including glial-derived neurotrophic factor (GDNF) by means of a specific differentiation-inducing culture medium. The ability to induce differentiation into astrocyte-like cells along with intramuscular or intrathecal (or other) delivery makes NurOwn technology highly attractive for treating ALS and Parkinson's disease as well as MS and spinal cord injury.
Petah Tikva's BrainStorm Cell Therapeutics (http://www.brainstorm-cell.com) is a biotech company developing adult stem cell therapeutic products, derived from autologous (self) bone marrow cells, for the treatment of neurodegenerative diseases. The Company holds rights to develop and commercialize the technology through an exclusive, worldwide licensing agreement with Ramot at Tel Aviv University, the technology transfer company of Tel Aviv University. The technology is currently in a Phase I/II clinical trials for ALS. (BrainStorm 14.11)
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8.6 Arineta Raises $10 Million
Arineta has raised $10 million from Israeli and foreign private investors. The proceeds should enable the company to complete development of its product: a proprietary CT scanner for cardiology. The securing of the financing means that Arineta's cooperation agreement with GE Healthcare, which will market the product when it is completed, comes into effect. The financing should be sufficient for most of the development process, but Arineta will probably need additional financing for the pivotal trials. The company hopes to bring its product to market in 2014. Caesarea's Arineta's (http://www.arineta.com) mission is to develop and deliver clinically effective, reliable and safe CT-based imaging solutions for the cardiology community. Arineta products will improve clinical outcomes by providing cardiologists with clear, sharp and accurate images for diagnostic and therapeutic procedures – while reducing risk, dose, and discomfort to the patient, and lowering the cost of healthcare delivery. (Globes 17.11)
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9: ISRAEL PRODUCT & TECHNOLOGY NEWS
9.1 EZPack Develops Innovative Portable Water Storage
EZPack Water (http://www.ezpackwater.com) of Savyon, Israel, develops, manufactures and markets unique proprietary solutions for water storage, distribution and mobility. The company products are aimed to markets such as emergency, disaster relief, construction and mining industry, military, home and outdoor, and others. The company has developed the Water Storage & Distribution System (WSDS) – the most advanced system for portable water supply. The WSDS is the ultimate solution for water supply in various situations. EZPack WSDS is approved by the Israeli Water Authority for water distribution in emergency situation. EZPack is supplying the WSDS to the municipalities and water utilities in Israel. EZPack has a full line of pillow (bladder) water tanks from 50 liters (12.5 gallons) up to 20,000 liters (5,000 gallons). The EZPack water tank is built from 2 layers: the outside layer – very rigid PVC that can endure harsh terrains; the inside layer – an inner insert made of food-graded material approved for storing drinking water. The inner-insert is the most advanced water product for emergency use, and it is based on EZPack proprietary design and concept. EZPack WSDS line of products is a comprehensive solution for water distribution – easy to store; quick to install; low cost. The WSDS does not require any maintenance and require very small space when stored. The system is also available for home usage providing home storage of 50-200 liters (12.5 to 50 gallons). The WSDS is the ideal solution for storing water as part of water purification systems and EZPack provides it to leading Israeli companies with those products. (EZPack Water 15.11)
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9.2 Zibaba Launches f-Commerce Ads Direct - Runs Facebook Ads Directly From Interface
To create a marketing solution that drives targeted visitors to Facebook storefonts, Zibaba is launching f-Commerce Ads Direct, enabling their several thousand Facebook storefront customers to easily set-up and run ad campaigns from their product catalog which are continuously analyzed and optimized according to conversations and social metrics. This is the first advertising solution fully integrated with a Facebook storefront. As a Facebook Preferred Developer, Zibaba is one of only a limited number of development companies given permission directly by Facebook to integrate the advertising system into their social storefront offering. f-Commerce Ads Direct powered by Zibaba includes informative analytics tools and dashboards to show Facebook store owners the exact performance of their advertising. This will include the knowledge of how much has been spent in relation to the amount of new sales, customers, fans and individual product 'likes'. Campaign optimization is based on the analytics tools, which enable optimizing campaigns according to target group, geography, day, product offering, and more.
Tel Aviv's Zibaba (http://zibaba.com) was founded in 2008 by Ronen Shlomo (CEO) and Arie Fishler (CTO) to offer marketing solutions that tap into the potential of social engagement. The company has made ground breaking developments in the world of social commerce and has become a leading provider of f-commerce marketing platform solutions enabling anyone to manage online stores within the Facebook social media environment. Zibaba is a Facebook 'preferred developer' company. (Zibaba 09.11)
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9.3 Endeavour Energy Selects ClickSoftware for Optimized Mobile Workforce Management
ClickSoftware Technologies announced that Endeavour Energy, the second largest state-owned energy corporation in New South Wales, Australia, has selected its enterprise mobility and optimized Workforce Management Platform to play a strategic role in helping Endeavour Energy improve productivity, customer service, visibility of field operations and compliance to Service Level Agreements (SLAs). Endeavour Energy is responsible for the safe and reliable supply of electricity to 2.1 million people in households and businesses. Following a search for a proven technology provider that had the solutions and experience to enable and optimize this process, Endeavour Energy selected ClickSoftware's ClickMobile and ClickSchedule solutions. Tel Aviv's ClickSoftware (http://www.clicksoftware.com) is the leading provider of automated workforce management and optimization solutions for every size of service business. Their portfolio of solutions, available on demand and on premise, creates business value through higher levels of productivity, customer satisfaction and operational efficiency. Their patented concept of 'continuous planning and scheduling' incorporates customer demand forecasting, long and short term capacity planning, shift planning, real-time scheduling, mobility and location-based services, as well as on-going communication with the consumer on the expected arrival time of the service resource. (ClickSoftware 09.11)
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9.4 Any.DO Launches Smartest Social To Do List App
Any.DO, the team behind the leading To Do list app for Android, Taskos, announced the launch of Any.DO for Android, the first To Do app that lets you create, organize and share tasks with your friends. Any.DO allows you to share even if the other person doesn't have the app. It is available free from Android Market. Everyone has a To Do list, whether it's in their head, on sticky notes or in a notepad. Now you just talk to your phone and it's there for you to prioritize, complete or make someone else's problem. Most people's lists have tasks for others, or at least shared tasks. With Any.DO, you can easily share your grocery list with your spouse, organize a social event or collaborate on a work project. Taskos, which launched less than one year ago without any press, has attracted over 1.3 million users and manages nearly 200-thousand tasks per day. Taskos users will be invited to migrate over to the new app.
Tel Aviv's Any.DO (http://www.any.do) was founded in 2010 by Omer Perchik, Yoni Lindenfeld & Itay Kahana. Frustrated with his own procrastination and the general complexity of getting things done, Omer was inspired to create a tool that will simplify the way people do things (so they can have more time for fun). The first step was to release Taskos, a simple to do list app, collect some feedback and test some concepts. It was a huge surprise when Taskos quickly became one of the most popular to do list apps. The Any.DO app has been largely influenced by the feedback from the previous app combined with a focus on a simple yet effective user experience. It is backed by a team of outstanding angel investors and advisors from Silicon Valley and Israel. (Any.DO 10.11)
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9.5 Cellint Awarded a New Patent in Europe
Cellint Traffic Solutions (http://www.cellint.com) was awarded another patent in Europe. Cellint's TrafficSense provides traffic data based on analyzing anonymous signals from cellular phones in vehicles, which is enhanced with external data sources, such as police reports and GPS probe data. The data is delivered to navigation systems, government agencies and cellular operators through various end user applications. Tel Aviv's Cellint is a global provider of cellular-based detection solutions. Based on its proprietary and non-disruptive technology, Cellint's TrafficSense system deliver highly accurate travel times, traffic speeds and slowdown alerts in realtime through the analysis of anonymous signals of cell phones in vehicles. Cellint's patented technology represents a breakthrough in delivering real-time traffic information and it's the only cellular-based system worldwide proven to provide such accurate traffic data by independent DOT-sponsored evaluations, (all reports are available upon request). This is a result of Cellint's fundamentally different technological approach compared to all other vendors which doesn't rely on triangulation calculations nor on statistical estimations or any cell towers' location (which don't have sufficient accuracy). Instead, Cellint creates reference database by recording cellular data over the roads and creating cellular signaling maps from ground truth drives. This provides orders of magnitude better location information, especially in urban areas, resulting in super accurate traffic information. Cellint's systems are deployed with great success over thousands of kilometers in the US, Europe and Israel. (Cellint 23.09)
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9.6 Alvarion Announces BreezeCOMPACT Wireless Broadband Compact Base Station
Alvarion unveiled its new BreezeCOMPACT compact base station. BreezeCOMPACT is a zero-footprint wireless broadband base station based on Alvarion's field-proven 4Motion 4G technology designed to help carriers face the increasing challenge of delivering high-quality indoor and outdoor coverage in a cost-effective manner. BreezeCOMPACT is an ideal solution for operators who seek the assured quality and reduced risks offered by Alvarion equipment and vast experience. BreezeCOMPACT, based on common Alvarion architecture, is easily integrated with Alvarion's 4Motion 4G solution to enable coverage and capacity extension in areas where a multi-sector macro base station is not needed. BreezeCOMPACT is in a class of its own, with a small form- factor that fits Micro deployment requirements, but is also equipped with a Macro base station-feature set in terms of capacity capabilities, number of users and services. The BreezeCOMPACT utilizes field-proven 4Motion modules and ecosystem elements, such as ASN-GW, AAA, EMS and end-user devices to maximize the cost-effectiveness of any deployment. Tel Aviv's Alvarion (http://www.alvarion.com) provides optimized wireless broadband solutions addressing the connectivity, capacity and coverage challenges of telecom operators, smart cities, security, and enterprise customers. Their innovative solutions are based on multiple technologies across licensed and unlicensed spectrums. (Alvarion 09.11)
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9.7 Mellanox ScalableSHMEM 2.0 and ScalableUPC 2.0 for High Performance Computing
Mellanox Technologies announced the release of ScalableSHMEM 2.0 and ScalableUPC 2.0 for High Performance Computing applications. These parallel programming interfaces extend Mellanox's I/O capabilities of low latency, high-throughput, low CPU overhead, Remote Direct Memory Access (RDMA) and advanced collective offloads, into areas of the high-performance computing market that require the unique capabilities, one-sided communication and shared memory semantics of SHMEM and PGAS/UPC programming languages. Used in conjunction with Mellanox CORE-Direct collective offloads and Mellanox Accelerated Messaging (MXM), ScalableSHMEM and ScalableUPC provide users the highest performance, efficiency and scalability for their parallel applications. Mellanox ScalableSHMEM 2.0 is developed in conjunction with the API definition from OpenSHMEM.org, and Mellanox ScalableUPC is developed in conjunction with the Berkeley UPC project.
Yokneam's Mellanox Technologies (http://www.mellanox.com) is a leading supplier of end-to-end InfiniBand and Ethernet connectivity solutions and services for servers and storage. Mellanox products optimize data center performance and deliver industry-leading bandwidth, scalability, power conservation and cost-effectiveness while converging multiple legacy network technologies into one future-proof architecture. The company offers innovative solutions that address a wide range of markets including HPC, enterprise, mega warehouse data centers, cloud computing, Internet and Web 2.0. (Mellanox 14.11)
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10: ISRAEL ECONOMIC STATISTICS
10.1 Israel's October CPI Rises By 0.1% As Housing Prices Fall
The Central Bureau of Statistics published the Consumer Price Index (CPI) for October on 15 November. The index rose by 0.1%, which was slightly lower than expected, as analysts had predicted a 0.2% rise. However, the price of homes, not included in the CPI, fell by 0.2% in October - the first such fall in three years. There was also a 0.5% fall in housing costs which are included in the CPI. In the first 10 months of 2011 the CPI rose by 2.3% in the middle of the government's target range for inflation. In September, the CPI fell by 0.2% following the social protests in the summer. Clothing was responsible for the largest price rise in October as winter collections came into the stores. Food prices rose by 0.3% in October as the summer's social protest faded. Cereal and baking products rose by 0.8% in October, milk by 1% and ice cream by 3.5%. (CBS 15.11)
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10.2 Israel's Trade Deficit Nearly Doubles
On 15 November, the Central Bureau of Statistics announced that Israel's exports amounted to NIS 14.3 billion and imports totaled NIS 21.3 billion in October 2011, resulting in a trade deficit of NIS 700 million. The trade deficit averaged NIS 4.5 billion a month in January-October, amounting to an annualized NIS 54.5 billion, compared with NIS 29 billion in 2010. Some 40% of imports in October were raw materials (excluding fuel and diamonds), 16% were machinery and land vehicles for investment, 14% were consumer products, and 30% were diamonds, fuel, ships and planes. The increase in imports has slowed across all categories: imports raw materials (excluding fuel and diamonds) slowed to an annualized 5% in August-October from 9.4% in May-July; imports of investment goods (except ships and planes) slowed to an annualized 15.7% from 24.3%; and imports of consumer goods slowed to 3.5% from 4.4%. Some 84% of Israel's exports were industrial exports, 14% were diamonds and 2% were agricultural produce. Growth of industrial exports rose to an annualized 7.7% in August-October from 3.5% in May-July, and the slowdown in high-tech exports (47% of industrial exports) eased to an annualized 4.7% in August-October from a 16.3% drop in May-July. (CBS 15.11)
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10.3 Foreigners Raised Investment in TASE to $252 Million in September
On 9 November, the Bank of Israel announced that foreign investment in Tel Aviv Stock Exchange shares totaled a net $252 million in September 2011, up from a net $96 million in August and net withdrawals of $57 million in July. Investment in September was above the monthly average of $208 million in January-September. Foreign investors also invested a net $55 million in Israeli shares traded abroad. Net foreign investment in TASE shares was $1.91 billion in January-September, most of which - $1.12 billion - was in the first quarter. Net investment fell to $511 million in the second quarter and to $291 million in the third quarter. Net foreign direct investment via the banks totaled $440 million, mostly in the high-tech and shipping industries, down from $530 million in August. Investment in September was similar to the monthly average in January-September. Foreign investors also sold a net $45 million in Israeli government bonds abroad. (Globes 9.11)
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10.4 Israelis Sold $388 Million in Foreign Stocks in September
On 9 November, the Bank of Israel announced that Israelis sold a net $388 million in foreign shares in September 2011, reversing the trend of the two preceding months. Israelis bought a net $737 million in foreign shares in August and $789 million in July. The Bank of Israel says that most of the sales in September were by investment institutions, which changed their policies. Investment institutions sold a net $124 million in September, after net purchases of $760 million in July and August each. Israelis also sold a net $322 million in tradable foreign bonds in September, after selling a net $294 million in August, and buying a net $75 million in July. Direct foreign investment by Israelis totaled a net $269 million in September, compared with net sales of $34 million in August, and net investment of $44 million in July. (BoI 09.11)
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10.5 GPG Survey Puts Tel Aviv 17th in Property Prices
Leading real estate website Global Property Guide (GPG) ranked Tel Aviv 17th on its world's most expensive cities list, up from number 20 on last year's list. According to GPG's annual survey, in September 2010 the average property price in Tel Aviv was $7,020 per square meter according to the exchange rate at the time. The government appraiser's report, published earlier this week, cited a price of $6,840 per square meter at the same period. The GPG survey, which rates the world's 94 most expensive cities, estimates average rent prices in Tel-Aviv at $2,322. The annual return on investment in property in the city was 3.3% in the past year, the survey states.
The highest ranking cities for the period between September 2010 and September 2011 are Monaco ($53,226 per square meter), followed by London ($20,505 per square meter) and Hong Kong ($19,323 per square meter). Property prices in neighboring Beirut are $4,258 per square meter, with average rents at $2,342. The cheapest city according to the survey is Tanzania's capital Dar es Salaam with average rent at $500 per month and an annual ROI of 8.57%. In Tel Aviv it takes 30 months of rent to finance to cost of a flat whereas in New York it takes 21 months; in Hong Kong – 31 months; in Paris – 31 months, and in the world's most expensive city, Monaco, it takes 58 months of rent to reach the average flat price in the city. (Ynet 17.11)
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10.6 Over Half of Israeli Families Living In Poverty Are Employed
More than half of Israeli poor families are working families, as the prevalence of working poor continues to expand. 51% of poor families were working families in 2010, up from 49% in 2009, the National Insurance Institute reported on 17 November in its annual Poverty Report. Moreover, despite Israel's strong economic growth last year, the prevalence of poverty barely changed, dipping to 13.2% of all families in 2010 from 13.4% in 2009. National Insurance Institute says that there were 433,300 poor families in Israel in 2010, amounting to 1,773,400 people, including 837,300 children - a slight improvement over the year before. Although the economic recovery, with its job growth and reduction in the unemployment rate helped alleviate poverty, conditions in 2009 were especially dire, due to the recession that year, which led to an increase in poverty. The proportion of persons living in poverty declined to 24.4% in 2010 from 25% in 2009 and the proportion of poor children declined to 35.3% from 36.3%.
A long-term perspective, however, shows a bleaker situation. The proportion of poor children rose from 26% in 1999 to 35.3% in 2010, and the proportion of persons living in poverty was just 19% in 1999. The proportion of elderly poor has fallen, thanks to higher pensions. Israel has one of the highest prevalence of poverty in the OECD, similar to the rates in Mexico. Although the Israel Gini Coefficient declined by 1% from 2009 to 2010, it is up 4.4% from a decade earlier, demonstrating greater inequality. As a consequence, Israel is fourth from the bottom in the OECD's inequality rankings - behind Mexico and Turkey. (Globes 17.11)
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11: IN DEPTH
11.1 ARABIAN GULF: Security Sectors in the Gulf - Immune to the Arab Awakening?
On 16 November Emile Hokayem wrote in Sada (http://carnegieendowment.org/sada/) that the behavior of security forces during the Arab Awakening has shaped the evolution of each uprising; unsurprisingly then, the long-term transitions also depend on their political systems' capacity to rein in and reform the security sectors - the military, internal security apparatuses, and paramilitary forces - that have grown too big, too powerful, too brutal, or too autonomous. While opportunities for security reform exist in transitioning countries, regimes that have withstood the political tremors are learning other lessons from the uprisings.
Excepting Bahrain and Oman, Gulf monarchies have experienced relatively mild popular pressure because of a less acute and more manageable set of economic and political challenges; in large part due to oil wealth, but also because of their political cultures. These regimes care little that their counterparts in the Middle East (similarly invested in internal “coup-proofing”) have otherwise succumbed to the wave of popular uprisings, suggesting that emphasis on security, once believed a guarantor of survival, was actually a contributing factor of their demise. Rather, Arabian Gulf monarchies have responded by increasing reliance on the security systems by strengthening patronage networks that link the ruling family to the officer corps and retired security personnel.
Arabian Gulf monarchies share a number of common features. They invest heavily in the security sector while remaining nonmilitary states and the army is not highly integrated into the economy or infrastructure. They have ensured the reliability of their security forces through a mix of incentives: patronage, prestige and access to rulers. Kinship is also a crucial instrument of security control; across the Gulf, scions of the ruling families fill top security positions, from the interior and defense ministries to the command of elite units. The best-trained and best-paid units of the army often hail from the tribes and regions of the rulers. In most Gulf states, Shi‘a are barred from the security forces. By basing composition on family, tribal and sectarian considerations, the monarchies hope that security forces will be less likely to mount coups, fracture internally and be less likely to join popular uprisings.
Most Gulf monarchies have resorted to government largesse as the primary means to preempt unrest. Naturally, this has extended to the security sector, where each new job and each pay increase is believed to pad the security cushion. As part of a massive $130 billion spending plan, Saudi Arabia announced in March bonuses and promotions for military personnel, additional funding for the religious police, and the creation of 60,000 internal security jobs. These last two measures bolster the power of the Interior Ministry, headed by the newly minted Crown Prince Nayef, thought to be averse to significant political reforms. Though facing no domestic challenges, Qatar also announced in September salary and pension increases of 120% for officers and 50% for regular troops.
The UAE has also tightened its control. Even as it held elections for its consultative assembly in September, the government reacted to calls for political reform by jailing activists. However, the UAE distinguishes itself by the greater professionalism of its security forces, in part due to the requirements resulting from a diverse population and a growing economy, but also due to an ambitious build-up of its military. It also famously relies on foreign contractors for a range of defense functions, and its build-up of a mercenary, non-Muslim, regime-loyal force (by Blackwater founder Erik Prince) seems to suggest a weapon to be deployed against domestic unrest stemming from foreign workers or internal discontent.
Bahrain stands out largely because of the magnitude of the popular protests as well as its systematic recourse to violence. In the face of widespread protests, the regime deployed all branches of the security apparatus and authorized them by royal decree to “take all necessary measures to protect the safety of the country and its citizens.” The result was a sweeping crackdown during which many abuses were committed against civilians, including alleged killings, torture and acts of vandalism. Military tribunals have been used to sentence civilians in opaque circumstances. Importantly, the security forces remained cohesive and achieved short-term goals to repel and contain protesters.
Like other Gulf states, the composition of Bahrain's security forces is unrepresentative of the population. The Shi‘a majority, which suffers from higher rates of unemployment, is denied access to jobs in the security realm while Sunni foreigners, deemed more reliable, are recruited as policemen and soldiers, many are later given citizenship. Saudi and Emirati troops intervened under the cover of the GCC's charter and there have been reports of increased recruitment of mercenaries since the uprising started. Many of the abuses have been blamed on non-Bahraini security personnel, though this may simply have been the case because they are more numerous and more of them were deployed. The government is unlikely to alter the composition of these policies as it considers that the involvement of Shia citizens in security forces could result in armed rebellion and lead the country to civil war.
The future of security reform in Bahrain will be reflected in the November 23 findings of the independent commission tasked with investigating the crackdown and the conduct of the security services. Established by the monarch, the commission is composed of five respected non-Bahraini legal experts headed by Egyptian-American legal scholar Charif Bassiouni. It is not yet clear whether the report will detail abuses, recommend the prosecution of those who conducted the repression, and suggest profound changes, like the reform of the National Security Agency and the Interior Ministry. Such recommendations would truly speak to the government's willingness and ability to move beyond purely cosmetic security change. If, however, the commission restricts itself to blaming rogue or unruly security elements for abuses and merely suggests that the solution lies in better training, it will ignore the deliberate use of force to crush and intimidate the opposition. On the other hand, should the commission identify senior Khalifa members as ordering and directing the repression, it could create internal dissent within the monarchy that would slow or block even the most timid effort at political reform.
Oman has also experienced widespread protests but its monarchy has responded with more sweeping reforms largely because, unlike other Gulf monarchs, Sultan Qaboos has concentrated his authority and is less constrained by family politics. Protests gained momentum in March in the industrial city of Sohar until the police (and later, the army) intervened to violently remove protesters. In response to the bloody crackdown and in an unprecedented move, Sultan Qaboos dismissed key senior security officials: the interior minister, Saud bin Ibrahim al-Busaidi and the intelligence chief, General Ali bin Majid. Furthermore, Oman has witnessed a move for greater independence of the judiciary from the police. Progress towards comprehensive security sector will depend on whether the parliament is granted greater oversight over the military and the police.
Some have suggested Kuwait as a model. Indeed, in a region where security is traditionally the purview of the ruler's diwan, Kuwait's active parliament has repeatedly scrutinized and challenged the government's security policies, going as far as to question defense procurement. In a recent indication of the parliament's involvement, the interior minister, Sheikh Jaber al-Khaled Al Sabah, was forced to resign in February after parliamentary outrage over the death of a prisoner held in police custody on non-political charges. However, the parliament's power remains limited. The interior minister's replacement Sheikh Ahmad al-Hamoud Al Sabah is also a member of the royal family and the resignation was not followed by an announcement of more profound security reforms.
Kuwait and Oman highlight that, ultimately, security reform is not just a matter of organizational, doctrinal or training improvements; it extrapolates just as much from the environment in which it operates. The temptation to blame abuses on unruly recruits and address problems uniquely through training or personnel changes eschews the real challenge. Indeed, an exclusive focus on professionalization of parts of the security sector (or, as often, the pretense of it) also does little to improve its overall behavior or loosen political control.
Emile Hokayem is Senior Fellow for Regional Security at the International Institute for Strategic Studies in Manama. (Sada 16.11)
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11.2 KUWAIT: Eastern Promise in China
Kuwait's sovereign wealth fund is taking significant steps toward increasing its presence in China, establishing a representative office in Beijing with the aim of capitalizing on the Asian giant's rapid economic progress and rising demand for energy.
The outlook for regional expansion this year by the Kuwait Investment Authority (KIA) was further boosted this month by official figures which showed the country's revenues had surged by 40% in the first half of 2011, with higher oil prices and output driving the growth. Fahad Al Shatti, the chief representative of the Kuwait Investment Beijing Representative Office (KIRO), told Kuwaiti media that the investment body believes growth in China will remain steady over the next few decades. “The Chinese economy is growing in a stable and sustainable way, which is in line with KIA's long-term investment horizon,” he told the Kuwait News Agency, adding that the KIA's investment in the country had grown to $10b, up from $2b a decade ago.
The KIRO headquarters, located in Beijing's business district, was inaugurated in early October with senior Chinese and foreign businessmen and diplomats attending. Al Shatti told regional media that KIRO's first priority will be to increase its investments in China to begin trading on the Shanghai Stock Exchange, adding that Kuwaiti exports of oil and crude products to China reached $10b annually in 2010, compared to $400m in 2004.
The Kuwaiti ambassador to China, Mohammad Al Thuwaikh, said that opening was “clear evidence of the keenness of the two friendly countries' leadership, governments and people for strengthening bilateral cooperation.” “It is inevitable for KIA to gain a foothold here, given that China has witnessed the rapid economic growth with stable environment, a high standard of living and diversity,” he said.
Following the opening of the Beijing office, the Ministry of Finance revealed on October 27 that state income between April and September was $50.8b, a 40% rise on the $36.3b in the same period of the last fiscal year. Kuwait is estimated to hold some 10% of proven global crude reserves, while the KIA has assets worth more than $300b according to the ministry's figures.
In 2010, China's demand for energy exceeded that of any other country for the first time, even surpassing the consumption of the US, with BP's 2011 “Statistical Review of World Energy” showing that the country was consuming a full 20.3% of the world's total production. China's economy is expected to grow by 9.5% this year and 9% next year, according to IMF estimates.
In mid-October, the Kuwait Embassy in Beijing also announced that the undersecretary of the Ministry of Commerce and Industry, Abdulaziz Al Khaldi, and the Chinese vice-minister of commerce, Fu Ziying, had proposed forming a joint committee to review trade relations between Kuwait and China. Al Khaldi called for “enhancing co-operation between the two sides to include tourism and investment, organization of fairs, and intensification of mutual visits to share information and exchange views,” according to local media.
KIRO chief Al Shatti told regional media that his headquarters will also act as a “springboard” for further investment in East and North-east Asia, reflecting a trend of sovereign wealth markets of moving away from more traditional regions into emerging markets. “[The office] closely works with our head office and mainly serves as its platform for exploring lucrative investment opportunities, with an initial focus in China, but also in the Far East,” he told Abu Dhabi's English-language newspaper The National.
With bilateral trade and investment ties burgeoning, Kuwait is hoping to capitalize further through its project to build an oil refinery in China. The Kuwaiti oil minister Mohammad Al Busairi is promoting a $9b plan for a China-Kuwait joint oil refinery to be run by the Kuwait Petroleum Corporation (KPC). The project in China's southern Guangdong province, expected to be completed in 2013, would have an oil refining capacity of 300,000 barrels per day and will produce 1m tonnes of ethylene per year, according to China's Xinhua news agency.
KPC said in October that it will decide soon on the international investors it will welcome to the joint venture with China Petroleum & Chemical Corporation, with 20% of its share to go on offer, with a final decision dependent on the results of some exploratory studies. (OBG 09.11)
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11.3 QATAR: Geared for Growth
Qatar's economy is set to post near record high growth again this year, after leading the world in 2010, though there are some concerns that this rapid expansion could lead to overheating. Meanwhile, Doha will be keeping a wary eye on the economic health of its major trading partners.
The Qatari economy expanded by a staggering 41.8% year-on-year (y-o-y) in the second quarter of 2011, with nominal GDP rising from $29.7b in second-quarter 2010 to $42.2b in the April to June term this year, according to data released by the Qatar Statistics Authority (QSA) at the beginning of October. This massive increase came on top of an 8.8% rise in the first quarter of the year. “Rising levels in the quantity of gas-related products and high energy prices have been the main drivers of nominal y-o-y quarterly GDP increase,” the QSA said in a statement. “The main contributor was the increase in liquefied natural gas (LNG) and other gas-related products. Condensates and other natural gas liquids showed a major jump following the operation at full capacity of the two new LNG mega trains.”
While the rate of expansion seen in the second quarter is not likely to carry through the rest of the year, Qatar will still record the fastest growth rate of any economy around the world. In late September, the IMF predicted that the Qatari economy would expand by 18.7% this year, falling back to a more moderate 6% in 2012, in part a result of the completion of a number of high cost state investment programs.
This high rate of growth will also allow the government to build up its cash reserves, with estimates putting the current budget surplus for 2011 at $8.5b, the equivalent of 4.9% of GDP in financial year 2011/12, according to a report issued on October 4 by QNB Capital, a unit of Qatar National Bank. Though this surplus will ease somewhat to $7.5b in the 2012/13 fiscal year, mainly due to increased outlays, the Qatari budget is forecast to remain well in the black for an extended period, with GDP set to increase by 10% in 2012 and beyond. An earlier study conducted by QNB Capital, carried out near the end of September, said that the national economy would be worth $173b this year, rising to $197b in 2012.
Though a strengthening economy is to be welcomed, there are some concerns that Qatar could experience too much of a good thing, with worries that high levels of liquidity could fuel inflation. There may be some truth behind these concerns, with QSA figures issued on September 28 showing that the Qatari consumer price index reached a two-year high in August. Though still at a modest 2.1% y-o-y, this could rise further if consumer demand grows.
The recent decision by the government to raise public servants' wages and allowances by 60%, with a 120% rise for military personnel, could also prime the inflationary pumps, though the Qatar Central Bank (QCB) has said it will take whatever measures are necessary to drain excess liquidity out of the market should steps be needed to rein in demand-based inflation.
While working from a position of fiscal strength, Qatar is already aware of the possible fallout from a return to global recession. The country's growth and surplus figures are based on the premise that the world will continue to buy that which Qatar has for sale, mainly gas and oil. At least one IMF official has sounded a note of caution over the potential for an economic downturn in other regions having an impact on Qatar and the other GCC member states.
While the GCC countries have deep fiscal reserves that could help them ride out a new wave of global recession, they are still at risk, according to Masoud Ahmad, the fund's director for the Middle East and Central Asia. “GCC countries' broad international linkages make them vulnerable to spillovers from the global economy,” Ahmad told international media in mid-October.
However, Qatar is better placed in terms of financial reserves than some of its neighbors, even it may have to take measures to protect its economy from any ills suffered by the global banking sector, sovereign debt market or a weakening of emerging markets. Though care will be needed to manage any fallout from a weakening global economy, the Qatari government has the tools and funds in hand to counter any blips on the economic radar. Having already announced state-backed investments of $95b between now and 2016, and with expectations that the private sector will also come to the party with up to $130b more over that time, Qatar will be looking to keep its own economy moving forward, even if those elsewhere stall. (OBG 17.11)
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11.4 EGYPT: Rising Investment in Telecoms
Large investments are being made in the Egyptian telecommunications industry as the private and public sectors look to boost capacity and increase the availability of new technologies. The Egyptian Ministry of Planning expects to see LE11.3b (€1.34b) in investment in the telecoms sector in the 2011/12 fiscal year, which started on July 1. In the wider telecoms and IT industry, the ministry forecasts LE13.9b (€1.64b) in investment, with 85% of that coming from the private sector.
The figures, published in a recent report, suggest a positive outlook for what has been one of the most dynamic sectors of the Egyptian economy. Demand remains strong and competition between several major players ensures that continued spending will enhance services.
While there were setbacks during the unrest of the early months of this year, when mobile telephone and internet communications were briefly suspended and concerns were raised that Egypt's large outsourcing industry would be affected, normality has quickly been restored. The official forecasts suggest this year will see a return to the high levels of investment last seen before the international financial crisis and the more recent revolution, which totaled LE14b (€1.66b) in 2008/09, according to the Ministry for Communications and Information Technology (MCIT).
Egypt's telecoms and IT sector attracts such attention both due to its huge domestic market of more than 80m people and its importance as an export-oriented services center. There were 77.76m mobile subscribers in Egypt in July, the last month for which figures are available, according to the MCIT's “ICT Indicators in Brief”, published in August. This indicates year-on-year growth of 29% and penetration of 96.57%, though these figures include many Egyptians own more than one phone or use more than one SIM card.
Due to the high penetration rate, competition between the country's three mobile operators – Vodafone, Mobinil and Etisalat – is intense, and in recent years, the companies have changed strategies to focus increasingly on expanding market share through expanded service offerings, aggressive pricing policies and increased data usage rather than improving penetration. According to figures from May featured in the local press, Vodafone's market share was 41.2%, with Mobinil closely behind at 39.4%. Etisalat, the market's most recent entrant in 2007, holds a 19.4% share.
The competitiveness of the sector has created a challenging market environment, leading to declining average revenue per user (ARPU), which ranged between LE30 (€3.55) and LE40 (€4.73) at the end of last year, with Etisalat at the lower end and Vodafone toward the top. Orascom reported that Mobinil's ARPU fell by nearly 20% in the first quarter of 2011, though this can largely be attributed to the political situation and network shutdown.
By way of comparison, in Jordan the two main players, Zain and Orange, had ARPUs of €11.56 and €6.55 respectively in 2010, while in Turkey, Vodafone reported ARPU of €8.11 in 2011 against Avea's €7.74 and Turkcell's €8.60.
However, efforts to bolster revenues through increasing usage of high-value services have shown traction. Mobile internet subscription rates grew by 43.17% between June 2010 and June 2011, to 8.9m, according to the MCIT. The scope for continued expansion is considerable: only 11.64% of mobile users had mobile internet subscriptions, and 34% of Egypt's growing body of internet users were going online through their handsets.
With network-sharing still extremely limited, operators are also investing in improving service quality, lowering the proportion of dropped calls and raising data capacity through spending on network equipment.
While the pending elections at the end of the month have raised question marks for investors, wary of the composition of the following government, there is little doubt that ensuring economic growth will be at the top of the agenda for any victor – and crucial to that will be the maintenance of the country's overall stability and it's encouraging regulatory approach – both of which have served to provide particular benefits for Egypt's sizeable outsourcing industry. The sector has benefitted from relatively low costs for labor, land and overhead, and a trained and multilingual workforce and access to the Arab World and Europe.
Particularly with continued investment and the current emphasis on human resources training and strengthening the value-added business, knowledge and IT processes outsourcing industries, it seems likely that the sector will continue to see success. (OBG 10.11)
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11.5 EGYPT: Is Military Rule in Egypt Really Temporary?
On 10 November, Philippe Droz-Vincent wrote in Sada (http://carnegieendowment.org/sada/) that the end of Hosni Mubarak's regime marks a critical juncture in Egypt's civil-military dynamic. In the breakdown of institutional order following the dictator's ousting on 11 February 2011 and the subsequent disappearance of the police, the Supreme Council of the Armed Forces (SCAF) reluctantly assumed power. The time frame for this arrangement (initially scheduled for six months) is currently unpredictable and may be prolonged. Faced with a possible surrender of its influence held under decades of authoritarian rule, the military is trying to strike a delicate balance. While not eager to impose indefinite military rule, the army seeks preservation of its political and economic privileges in the emerging system. The military was able to project a cohesive facade in the first months of the revolution, but as pressures mount from the civilian front in the lead-up to November 28's legislative elections, the Egyptian military is slowly discovering it is no longer the agent of its own desires.
Under Mubarak, the military in Egypt was a key component of the regime - much more than its counterpart in Tunisia under Ben Ali. Though in recent decades the Egyptian president was technically autonomous from the army, the high command was often consulted on fundamental issues: for example, the privatization debates post-2004 or later with the question of Mubarak's succession. While not involved in day-to-day crackdowns (as the ministry of interior and its dreaded secret police) the armed forces operated as the regime's last resort. Prior to 2011, the army responded to the president's call on several occasions: it provided institutional support in the wake of an Islamist plot following the 1981 assassination of Anwar Sadat; it crushed a rebellion of Central Security Forces in Cairo in 1986; and it helped defeat Islamist insurrections in Upper Egypt in the 1990s. The military has since been charged with regularly trying civilians accused of terrorism in special military tribunals.
Egypt's military also has substantial holdings within the national economy: it owns a number of for-profit enterprises (factories for the manufacture of cement, jeeps, washing machines; the bottling of water) as well as agricultural farms and large swaths of reclaimed desert land. These economic inroads have served as an importance source of patronage for the officer corps, and they reflect how successful the military has been in shielding itself from the effects of economic liberalization and the rapid decrease in state resources.
Even so, the army has paradoxically managed to maintain a popular image as national protector - an image capitalized on in the first months of the revolution. In the 18-day confrontation (January 25-February 11) between the Mubarak regime and the massive populist protest movement, the army was often ambiguously situated and only occasionally threatening: a feature later erased by the much-heralded slogan “the people and the army are one” - the Tahrir Square expression of confidence in the military meant to tip soldiers toward the protesters' side.
But the SCAF is in a difficult position as result of its multifaceted interests. It defines its current mission as “the restoration of stability” - a touchstone that plays on widespread fears of an uncertain future. But despite those uncertainties, decentralized popular movements continue to exert pressure, leaving the SCAF all too uncertain of its prerogatives - and fearful of entry into the uncharted civilian territory of politics. None of its current members were involved in the power games of the former autocracy (with exception of Mohammad Hussein Tantawi, who many perceive as having been an active participant in the Mubarak regime), but to preserve the status quo, the military is exercising close vigilance on rising civilian leaders. It resisted transferring power directly to a civilian transitional government, and later dictated the terms of the political handover - resulting in the hurried and very limited 19 March constitutional reform and the so-called “road map” for a transition to a civilian democratic rule: legislative elections, followed by constituent assembly elections, then presidential elections.
To do this, the SCAF initially curried the favor of the Muslim Brotherhood old guard, considered an organized and powerful opposition (and thus a reliable interlocutor in contrast to the “messy” popular movements of Tahrir square) - only to grow nervous about Islamist influences in government. As a result, the military tried (unsuccessfully) to push for a declaration of inviolable constitutional principles that would frame the transition to come. It has increasingly relied on contacts with local notables (sometimes former NDP) to identify actors it will be more comfortable with. To maintain this grip, the army eventually resorted to unpopular measures: reinstating emergency law; insisting on the three rounds of elections to the majlis al-sha‘ab (the lower house of parliament); preserving the “workers and farmers” quota for parliament and issuing a controversial electoral law opening for gerrymandering.
This is a dead-end policy. Greater involvement in politics risks awakening political controversies within the army and undermining the relatively apolitical internal dynamic - a nightmare scenario for the SCAF, which has struggled to protect the military's cohesiveness. The SCAF justifies often violent reactions to perceived threats to military cohesiveness on the shaky premise that “outside forces conspire against Egypt” - and directly undermining its unrivalled credibility as “protector of the January 25 Revolution.” The 9 October bloodbath of Coptic demonstrators illustrates best the failure of a SCAF-guided Egyptian state.
A new bargain will necessarily emerge between the military and the nascent political system - one much more complex than what the slogan “democratic control of the armed forces” might imply. It will depend critically on the SCAF's organization of proper elections in 2011-2012: ones that differ starkly from the heavy violence and generalized fraud of previous terms. Furthermore, upcoming civilian leaders must consolidate the democratic transition, and lead to a changing (though still significant) role for the military. This so-called “Turkish model” would result in an enduring guardian role, but also risk heavy interference of military staff in politics (through the National Security Council, MGK, as in Turkey) with “dirty tricks”: threats, intimidation and even coups d'état. Remarkably, the receding of the Turkish military incursion into politics has paralleled the deepening of Turkish democratization post 2005 - a process that now seems distinctly plausible in a post-Mubarak, post-SCAF Egypt.
The ability of civilian leaders to limit the military's influence is limited but not impossible. A few practical lessons emerge from historic precedents in Latin America in the 1980s: in transitions, the militaries are less moved by an appetite for power than by a desire to protect their corporate interests and pass judgment on “proper” civilian leadership (which it does based on an assessment of national security, its own institutional interests, and of its regard of civilian crisis management). That officers must resist appeals from their more ideological comrades is essential. Important members of the SCAF (such as Chief-of-Staff Sami Enan seem of this kind) and are especially enhanced by outside contact. Hundreds of Egyptian officers have been socialized in US military academies to accept the role of the military as a legalist corps in democratic settings. Such a model might be attractive for Egyptian officers in search of a new posture in this time of uncertainty.
Philippe Droz-Vincent is assistant professor of political science and teaches at the Institut d'Etudes Politiques in Paris. His work currently focuses on political regimes, armies and transitions from authoritarianism in the Middle East. (Sada 10.11)
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11.6 MOROCCO: Growing Green Energy
With Moroccan electricity growing steadily and forecast to double by 2020, and with energy imports pressuring both trade and fiscal deficits, the government is implementing ambitious plans to increase capacity. In particular, the state aims to significantly expand the role of renewables in Morocco's energy mix. It has attracted foreign investment into the segment, with a number of European-backed solar and wind-power projects set to begin in coming years.
As of May, total Moroccan installed electricity production capacity stood at 6405 MW, 67% of which is coal and hydrocarbons-based. The country also imports around 15-20% of its electricity from Spain. Demand is growing rapidly – electricity consumption grew by an average of 6.9% per year between 2002 and 2010, reaching 26.5 KWh at the end of the period. Government forecasts suggest demand will double from current levels by 2010 and quadruple by 2030.
To meet Morocco's electricity needs, the government has adopted and is implementing a three-phase strategy. The first, short-term phase, which runs from 2009 to 2012, involves increasing capacity and efficiency in the national network. Since 2009 an additional 1085 MW of capacity has been installed, costing Dh12b (€1.05b).
As part of the overhaul of the overall network, the country has unveiled new generation plants. These new installations include a 140-MW wind farm near Tangier and a 472-MW solar power plant in the north-east area of Ain Beni Mathar. In the same period the government also invested Dh2.5b (€218.5m) in upgrading and renovating works on plants representing 2350 MW of generating capacity in order to boost efficiency.
The second phase, which addresses the medium term and runs between 2013 and 2019, seeks to diversify electricity production by increasing the proportion generated through renewables and natural gas. The government aims for 42% of Moroccan electricity capacity to be generated by renewables by 2020, up from 33% in 2009, divided equally between hydroelectric, wind and solar sources. Solar and wind-generated capacity will increase from 4% of total capacity in 2009 to 28%. The final, long-term (2020-30) phase will further emphasize alternative energy sources.
Increasing renewable energy use looks a smart move for Morocco. The country lacks hydrocarbons and is heavily reliant on imports. Consequently, high international oil prices have pressured the country's trade balance. Government subsidies aimed at maintaining price stability for fuel, which currently accounts for 27% of electricity production, are also putting pressure on the fiscal deficit.
In contrast to imported fuel, solar panels in the country's desert areas are capable of producing more than 5.5 KWh per sq. meter, while the country's long coast line gives it plenty of potential wind power capacity – the government aims to achieve a total wind power capacity of 25,000 MW onshore alone. By increasing the use of renewables, the aim is to bring the proportion of fuel oil-generated electricity to 10% of total output by the end of the decade.
Foreign investment is helping the government meet its goals in terms of increased capacity, particularly for renewals, with money flowing into several projects due in the near future. In October it was announced the Germany-based organization behind the Middle East and North African transnational solar and wind power mega-project, Desertec Industrial Initiative (Desertec), had decided to build the project's first facility in Morocco, choosing the kingdom over fellow candidate Algeria. Construction on the facility is scheduled to begin next year, at an investment cost of $800m. A wide range of major European banks, energy companies and others, are backing Desertec, seeing an opportunity to leverage important renewable resources in the region and eventually export solar and wind-generated electricity to Europe and Africa.
In September, the French company GDF Suez announced plans to invest Dh2.2b (€192.28m) in a 135-MW, 45-turbine wind power site near Dar Chaoui, 30 km east of Tangier. The facility, the country's third wind farm, should be completed by December 2012 and will increase current installed wind power generation capacity by almost 50%. Construction of a fourth wind farm, which will ensure a period of three years, is due to begin shortly. The 150-MW facility, which will be in the Taza region, will consist of 75 turbines and cost Dh3b (€262.2m).
Pre-existing facilities are also being expanded through foreign investment. The French company Theolia in June bought state electricity firm ONE's interest in Morocco's first wind farm, the Koudia Blanca facility near Tetouan, for Dh16m (€1.4m) and will increase the site's generating capacity from its current 60 MW to 100 MW by the mid-point of next year, with an ultimate goal of 300 MW by 2014. (OBG 15.11)
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11.7 GREECE: Lucas Papademos Aims to Steer Greece out of Crisis
It took days of bickering before Greece's two largest parties finally agreed that Lucas Papademos would lead Greece through the crisis as its interim prime minister. The extended negotiations revealed his political strengths -- and showed that he can stand up to both the socialists and the conservatives. Finally, after days of wrangling between the major political parties in Athens, white smoke is finally wafting out. Habemus papam, or more precisely, Habemus Papademos.
Lucas Papademos, the 64-year-old former vice president of the European Central Bank (ECB), was chosen as Greece's interim prime minister and to lead his country out of the political chaos of recent weeks and out of the crisis. The economist with an impeccable reputation has won out in the power struggle with Greece's political heavyweights. In doing so, he has given the first indication of his own political strength.
Until the very end, Giorgios Papandreou, who is still prime minister and leader of the ruling socialist party PASOK, and Antonis Samaras, head of the conservative New Democracy party, had tried to box in the crisis manager. In the meantime, other candidates' names were thrown into the hat, including that of Filippos Petsalnikos, speaker of the Greek parliament.
Strictly Limited
Papandreou, for example, wanted assurances that his finance minister, Evangelos Venizelos, would retain his position and likely other important allies as well. Samaras, on the other hand, wanted the date for new elections to be set for no later than 19 February and for the transitional cabinet's freedom to act to be strictly limited to the implementation of the decisions made in Brussels in late October.
In the end, both of them had to give ground -- just how much will become clear in the coming days, as will the consequences of their concessions. Samaras, in particular, is under pressure within his own party. After 18 months of categorically rejecting all reforms or cost-cutting measures, many members of his party base are enraged at his about-face. Samaras had always pointed to immediate elections as the only way out of the crisis.
Now, though, he has teamed up with his opponents and is trying to mollify his supporters. He has decreed, for example, that no active member of his parliamentary group should become a member of the new government so as to avoid being branded by the unpopular resolutions that will have to be made. Instead, in what is a uniquely Greek form of compromise, only former conservative bigwigs can join the cabinet, including prominent ex-ministers and former EU representatives.
The Right Man for the Job
The choice of Papademos is almost symbolic of political developments in Athens. It took Papandreou three tries before he finally got himself elected the head of government in October 2009. It also took Papademos three tries.
In 2009, he refused Papandreou's offer to assume a key position in his socialist government. In the summer of 2011, when Papandreou undertook his most recent cabinet reshuffle, he graciously declined to assume the role of finance minister, thereby clearing the path for Venizelos. Now he's the man on top, the new leader of a freshly discovered national unity.
Papademos, who served as the governor of Greece's central bank before heading to the ECB, could be exactly the right man for the job at this crucial phase. He enjoys a reputation for being a pragmatic thinker, a technocrat without a frozen political ideology, allowing him to take decisions based on economic or political necessity. During his term as ECB vice president, he was viewed as a disciple of strict pro-stability policies.
Still, the near future will be crucial to his success. He will have to establish his course and liberate himself for good from the parties and their political shenanigans. The political class squandered any goodwill it still enjoyed among the Greek population long ago. Papademos must now take advantage of that fact to assemble a cabinet reflecting his own economic and professional persuasion. In so doing, however, he must walk the fine line between economic competence and political support. After all, Papademos will also need a majority in parliament.
Papademos will also have to decide whether elections can really be held as early as 19 February. Such an early date would make effective crisis management difficult as it would mean an immediate start to campaigning. What's more, 50 of the roughly 100 days in the run-up to the election would see no political activity whatsoever. All parliamentary activity would grind to a halt at least 23 days before the election. Plus, before that, there would be the Christmas and New Year's holidays together with all the vacation days that go with them.
Continued Support from His Predecessor
Papademos must also convince members of parliament to support his proposals, particularly the opposition. Indeed, a leaked internal working paper of the conservatives has created a furor in Athens recently. Though party officials have vociferously denied its authenticity, the document says that conservatives have pledged their support for the "transitional period," but only in a pro forma manner and so that they can "later change" any cost-cutting decisions.
Papademos will likely enjoy the clearest support from PASOK, which holds a slim majority in parliament. Papandreou has always thought highly of the banker and nothing has happened to change that. What's more, Papandreou wants to step down from office as a great statesman who will continue on as head of PASOK, the party his father founded. (Der Spiegel 10.11)
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11.8 CYPRUS: Moody's Downgrades Cyprus' Bond Ratings to Baa3/P-3
On 4 November, Moody's Investors Service (http://www.moodys.com) downgraded Cyprus' government bond ratings to Baa3 from Baa1 and placed the ratings on review for further possible downgrade. The rating agency has also downgraded Cyprus' short-term rating to Prime-3 from Prime-2 and placed it on review for further possible downgrade.
The key drivers for the rating announcement are:
1. The high likelihood that the Cypriot banking system will require state support in 2012 as a result of the large expected write-downs on its exposures to Greek government bonds. This state support will have a significantly negative impact on the government's debt metrics. The full extent of required state support for the Cypriot banking system could increase further, given the substantial downside economic and financial risks in Greece.
2. The Cypriot government's loss of international market access and the resulting likelihood that the government will need to seek emergency funding from official sources.
3. Cyprus's weaker-than-expected institutional capacity to approve and implement the budgetary and structural changes that are needed to correct the government's rising debt trajectory and improve the longer-term sustainability of its public finances.
Moody's believes that the combined impact, and the links between, these three factors on the government's balance sheet is, at best, consistent with the lower end of the Baa rating range. The structural rigidities in the government budget are not being decisively addressed, increasing risks to the fiscal consolidation plans. These vulnerabilities have also substantially reduced the government's ability to absorb an increase in debt stemming from the crystallization of contingent banking liabilities. The potential size of these liabilities, along with the rapid deterioration of conditions in Greece and the government's weak response to these adverse developments have resulted in a loss of international market access.
The decision to maintain the ratings on review for further downgrade reflects the need to assess the substantial downside risks to the government's fiscal performance, the Cypriot banking sector, and the state's future funding plans. A rising probability that these risks will crystallize would likely cause the government to lose its investment grade debt rating.
Ratings Rationale
The first driver of Moody's two-notch downgrade is the very high likelihood that the Cypriot government will need to contribute to the recapitalization effort of the banking system. In accordance with the revised deal on greater public sector involvement (PSI) in Greece, announced on 27 October, the losses on Greek government bonds are now more than double the levels stipulated under the 21 July PSI deal. This will cause the system to become under-capitalized. Given the high risk that the banking system will be unable to raise the necessary capital in the private sector, there is a strong likelihood that it will require assistance from the Cypriot government. Consequently, Moody's debt calculations for the sovereign now assume a minimum of €1 billion in government-financed recapitalization costs; in total, Moody's base case is that the general government debt-to-GDP ratio will rise by 5-10% as a result of bank recapitalizations.
The second driver of the downgrade is the Cypriot government's loss of international market access and the resulting risk that the government will need to seek emergency funding from official sources, such as the EFSF. As is the case for a number of countries in the euro area, the difficulties that Cyprus has faced over the past year are likely to have a long-lasting impact on investors' perceptions of the riskiness of government debt, and therefore the sovereign's medium-term funding costs. Moody's also believes that, within the euro area context, the conditionality that is associated with official funding places the creditworthiness of supported sovereigns under pressure because a precedent has now been set with Greek PSI. Moody's notes that the pledged bilateral loan from Russia should satisfy the bulk of Cyprus's funding needs for 2012 and address any immediate liquidity pressures. Moreover, the country's domestic market remains open, but at a higher cost.
The third driver of today's downgrade is the Cypriot government's weaker-than-expected capacity to implement, in a timely fashion, the budgetary and structural changes that are urgently needed to correct the government's rising debt trajectory. Recent developments have also illustrated the government's inability to respond decisively and credibly to shocks such as the destruction of the Vasilikos power plant on 11 July 2011, which was a very disruptive event from a political, economic and financial standpoint. In the months since the plant's destruction, the Cypriot government has faced a number of delays in passing fiscal consolidation measures, and structural fiscal reform measures appear to be playing a smaller role than was previously envisaged. Moody's is concerned that conflicts between the various political parties, as well as the trade unions, could impede fiscal consolidation and structural reform at a time of weakening economic conditions both in Cyprus and in its major trading partners.
Factors To Be Considered In The Review
Moody's review of Cyprus's sovereign rating will focus primarily on the recapitalization needs of the Cypriot banking sector. The situation in Greece remains highly volatile and the magnitude of losses that the Cypriot banks will experience on their Greek government bond portfolio and lending book could require further government-financed capital injections. During the review period, Moody's expects to receive additional information about the capital requirements of all Cypriot banks. This should allow the rating agency to refine its estimates of the likely extent of the government's contribution to this effort.
The review will also focus on structural changes to key expenditure areas such as public sector pensions, public sector wages and social transfers. The second package of fiscal consolidation measures, which was sent to parliament on 13 October, contains some means-testing for social transfers, although there is probably more scope to cut these expenditures further. The government has also committed to delivering reforms to address the cost-of-living adjustment for public-sector workers; however, given trade union pressures, this will be difficult to achieve, but will ultimately be important for improving the sustainability of the Cyprus's public finances, which is a particularly urgent concern given the additional fiscal pressures that will be generated by stressed macroeconomic conditions.
These two factors will determine the extent of the Cypriot government's need for external support from official sources, such as the EFSF (or the subsequent European Stability Mechanism (ESM)) for funding and if so for how long. In Moody's view, a reliance on the EFSF or ESM for funding increases the risk of burden-sharing with private sector creditors. (Moody's 04.11)
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11.9 BULGARIA: Bulgarian Budget Positive, Eurozone Clouds Outlook Ratings
On 17 November, Fitch Ratings (http://www.fitchratings.com) said the Bulgarian parliament approved a budget yesterday that should put the country on a path to further reduce its deficit. Fitch views Bulgaria's Outlook as Positive. It's unlikely that the rating would be upgraded without economic growth and stabilization of the banking sector.
The draft budget targets a deficit of 1.3% of GDP. This is predicated on 2.9% economic growth, a level we consider optimistic given the slowdown in the Eurozone. The European Commission, for example, puts Bulgaria's growth rate at 2.3%. However, Bulgaria has also based its figures on 1% revenue growth, which we consider to be cautious and achievable.
Bulgaria's fundamental credit position is on the right track - the country's economy has displayed impressive flexibility in adjusting to the global financial crisis. However, exports have driven the recovery and we expect those to weaken given the increasing risk of a recession in the eurozone. It's this exposure to the eurozone that makes the Outlook uncertain.
Then there are problems with the banking system. For one, the amount of non-performing loans has continued to increase. It is encouraging that rate of increase has slowed compared with at the start of the crisis.
Foreign ownership of banks represents another challenge.
Greek and Italian institutions control over 40% of Bulgarian banking system assets. It is unlikely the Greek banks would be in a position to recapitalize their Bulgarian subsidiaries in the event of a major deterioration in asset quality. Italian-owned UniCredit Bulbank, however, accounts for approximately 15% of Bulgarian banking assets and we consider there to be a high probability that UniCredit would support this bank if it needed additional capital.
Pre-crisis growth rates of over 6% were based on large capital inflows and rapid bank credit growth to the private sector, which is no longer available. The lack of credit is likely to weigh on GDP growth.
We consider the Bulgarian banking system to be sufficiently robust to the risk of an extreme deterioration in the Greek and Italian financial system. This is partly because the subsidiaries are relatively small compared to their parents, they do not hold significant quantities of Greek or Italian sovereign debt and the Bulgarian National Bank could limit attempts to repatriate funds that contravened prudential regulations. Notwithstanding the strength of the banking system, we cannot entirely rule out some kind of panic such as a deposit run. In the unlikely event that this did occur, we would expect the National Bank to act swiftly to provide liquidity to the largest banks. (Fitch 17.11)
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